New fiscal framework of the European monetary union

European Economic and Monetary Union faces the most serious crisis since its foundation. The concept of the Union with a single monetary policy and autonomous fiscal policy, which is partially limited by the fiscal rules, as defined by the Maastricht Treaty (later confirmed by the Lisbon Treaty) and specified by the provisions of the Stability and Growth Pact, has proved to be totally inadequate to address the problems of fiscal discipline of the member states. In such circumstances, the need for institutional reform of the European Economic and Monetary Union has been imposed. Revised fiscal rules and regulations on the coordination of economic policies promote institutional base of EMU. The effectiveness and credibility of the new fiscal framework depends on its strict application, readiness of the Commission to monitor fiscal discipline of the member states and the willingness of other institution, firs of all Council to limit the degree of political discretion.