French presidential candidate Francois Hollande wants to avoid austerity implications (photo:dpa)

Is the European fiscal compact a milestone or a placebo just to soothe the markets?

The European fiscal compact aims to commit EU member countries to strict financial discipline. Many elements of the compact go in the direction of binding commitments very similar to those of the German ‘debt brake’, but both legal and political imponderables suggest that the European balanced budget rule is unlikely to meet its high expectations. In the final of his four-part series, GIS expert Professor Dr Michael Wohlgemuth explains the key aspects of this new intergovernmental treaty.

MARCH 2, 2012, was a milestone in the European Union’s history according to German Chancellor Angela Merkel. It was the day the Treaty on Stability, Coordination and Governance in The Economic and Mo...

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Dr. Michael Wohlgemuth
The crucial point of the fiscal compact is not its declaration of noble and ambitious aims, but its ability to deliver strict monitoring and sanctions. Here, the compact is, on paper, much more rigorous than any previous European fiscal agreement
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