By contrast, certain other economic policies continue to be set in a national context. Fiscal policies, however, must be formulated in accordance with the so-called Stability and Growth Pact. By signing this Pact, the Member States which make up the euro area agreed to reduce their general government deficits to close to balance or even to create a surplus in the medium term.
This is intended to enable automatic stabilisers to work throughout the economic cycle, while simultaneously observing the limit of 3% on the public deficit/GDP ratio, as laid down in the Maastricht Treaty.