Consider the following statements : The ‘Stability and Growth Pact’ of the European Union is a treaty that 1. limits the levels of the budgetary deficit of the countries of the European Union 2. makes the countries of the European Union to share their infrastructure facilities 3. enables the countries of the European Union to share their technologies How many of the above statements are correct?
Explanation
* The Stability and Growth Pact (SGP) is an agreement, among all of the 27 member states of the European Union, to facilitate and maintain the economic stability of the EU countries.The European Commission and the Council of the European Union, monitors the fiscal condition of EU member countries from time to time to ensure their fiscal stability.
* Statement 1 is correct: It is true that SGP aims to level the budget deficits of European countries. The corrective arm of the Stability and Growth Pact ensures that Member States adopt appropriate policy responses to correct excessive deficits (and/or debts) by implementing the Excessive Deficit Procedure (EDP). Also the SGP requires the EU Member States to lay out their fiscal plans for the next three years to limit their budget deficits.
* Statement 2 and 3 are incorrect: The SGP treaty does not require its members to share their infrastructure facilities nor their technologies with other countries. The purpose of the SGP was to ensure that fiscal discipline would be maintained and enforced in the European Union.