With respect to fiscal policy, the EU Treaty and the Stability and Growth Pact oblige euro area member states to achieve budgetary positions close to balance or in surplus, in order to provide a safety margin to the 3 % deficit limit. However, the fiscal track record of the euro area is mixed.
In the early years of EMU, the Stability and Growth Pact led to an end of ever-rising debt ratios. Since then, fiscal discipline has regrettably deteriorated in some Member States, which cannot be explained by weak economic growth alone. The Governing Council of the ECB is seriously concerned about the recent changes to the Stability and Growth Pact.