European Fiscal Compact

The Fiscal Compact (formally, the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union; also referred to as TSCG or more plainly the Fiscal Stability Treaty), is an intergovernmental treaty introduced as a new stricter version of the Stability and Growth Pact, signed on 2 March 2012 by all member states of the European Union (EU), except the Czech Republic, the United Kingdom, and Croatia (subsequently acceding the EU in July 2013). The treaty entered into force on 1 January 2013 for the 16 states which completed ratification prior of this date. As of 1 April 2014, it had been ratified and entered into force for all 25 signatories.

While the entire treaty applies to ratifying eurozone states, only Title V, covering euro summit participation, automatically applies for ratifying non-eurozone member states. However, these states can attach a declaration to their instrument of ratification stating their desire to also be bound by the treaty's fiscal provisions (Title III) and/or enhanced economic coordination provisions (Title IV). Both Denmark and Romania have declared themselves to be bound by all treaty titles, while Bulgaria declared itself bound by all treaty titles except of Title IV.