The Stability and Growth Pact (SGP) is a binding diplomatic agreement among European Union (EU) member states. Economic policies and activities are coordinated cohesively to safeguard the stability of the economic and monetary union.

MAIN FEATURES

1. The Stability and Growth Pact (SGP) is a set of fiscal rules designed to prevent countries in the EU from spending beyond their means.
2. A state’s budget deficit cannot exceed 3% of GDP and national debt cannot surpass 60% of GDP
3. The European Commission and the Council of Ministers issue an annual recommendation on policy measures and survey member states in order to keep each nation compliant with budget regulations. According to the agreement, countries that break the rules for three consecutive years are fined a maximum of 0.5% of their GDP.
4. The SGP is criticized for its strict fiscal rules, lack of compliance, and perceived favoritism toward certain nations.

PREVIOUS YEAR QUESTION

Consider the following statements :                                      (2023)

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?

(a) Only one

(b) Only two

(c) All three

(d) None

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