UPSC Prelims PYQ 2023: Stability and Growth Pact — EU fiscal rules

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?

1. Only one
2. Only two
3. All three
4. None

Explanation

Only statement 1 is correct

• 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. The SGP aims to ensure that countries in the EU do not spend beyond their means. To achieve this goal, a set of fiscal rules are enforced to limit budget deficits and debt relative to gross domestic product (GDP).
• The SGP is focused on fiscal discipline and does not cover the sharing of infrastructure or technologies among EU countries.

Answer: (a) Only one; Difficulty Level: Hard