The accession to the euro area will also entail the obligation to pursue balanced economic policy in the future. In
order to avoid the negative impact of irresponsible fiscal policy on the single currency and price stability, the
Stability and Growth Pact (SGP) has been created, which sets restrictions on fiscal policies of the governments of the
EU Member States. The SGP aims to achieve fiscal discipline within Member States and coordinate economic and fiscal
policies, which would contribute to the sustainable functioning of the common monetary and fiscal policy.
Achievement of fiscal discipline. According to the SGP, Member States must aim to achieve a government budget position close to balance or in surplus in the medium term. A close-to-balance budget position enables Member States to respond to cyclical changes in the economy, while maintaining the annual budget deficit at less than 3% of GDP. The states have assumed this commitment within the Maastricht Treaty.
Coordination of economic policies. Member States that belong to the monetary union must annually submit a Stability Programme, and those EU Member States who are striving for membership of the EMU must submit a Convergence Programme. These programmes provide an overview of the budgetary and economic policies of the countries. The objective of the economic policy reflected in the Convergence Programme is to meet the Maastricht criteria for the introduction of the euro, and in the case of the Stability Programme, to continue with reasonable budgetary policy and to achieve and maintain a close-to-balance budgetary position. The programmes are submitted to the European Commission and the Council of the European Union for assessment once a year within the timeframe of mid-October to 1 December, i.e. after the submission of draft budget to parliaments.
Estonia's role in the EU’s economic policy will increase after entering the euro area. After becoming a full EMU member and the introduction of the euro, representatives of the Ministry of Finance will start to participate in the work of the Eurogroup. The Eurogroup only comprises representatives of the states using the euro and its role in making economic policy decisions is on the increase. Representatives of Eesti Pank will have a say in the formation of euro-area monetary policy by participating in the work of the Governing Council of the European Central Bank.