Croatia

IX - Fiscal Compact

The Fiscal Compact (Treaty on Stability, Coordination and Governance in the Economic and Monetary Union) was signed on March 2, 2012. Negotiations on this Treaty began between 26 member states of the EU (all but the UK) after the 8/9 December 2011 European Council. 25 contracting parties eventually decided to sign the Treaty (not the Czech Republic).  
After ratification by the twelfth Eurozone member state (Finland) in December 2012, the Fiscal Compact entered into force on 1 January 2013. For several contracting parties the ratification is still on-going.  
(
http://www.european-council.europa.eu/eurozone-governance/treaty-on-stability?lang=it)

Negotiation
IX.1
What political/legal difficulties
did Croatia encounter in the negotiation of the Fiscal Compact, in particular in relation to the implications of the treaty for (budgetary) sovereignty, constitutional law and the budgetary process.

Croatia has not (yet) adopted the Fiscal Compact. No particular fiscal rules as required by the fiscal Compact exist in the Croatian Constitution. Croatia has only got its own Croatian Law on Fiscal Responsibility adopted in 2010 which entered into force on 1 January 2011,[1] but it is only an ordinary law since it is neither a part of the Croatian Constitution nor it is a law with constitutional legal strength.

Ratification
IX.2
How has the Fiscal Compact been ratified in Croatia and on what legal basis/argumentation?

The Fiscal Compact has not been ratified in Croatia since it is not a Member State. However, Croatian leaders have pointed out (such as current Croatian President of Government Zoran Milanovic) that Croatia will respect the rules of the Fiscal Compact even before 1 July 2013 when Croatia will join the European Union.[2] No evidence of this could be found in practice.

Ratification difficulties    
IX.3
What political/legal difficulties
did Croatia encounter during the ratification of the Fiscal Compact?

Croatia has not ratified the Fiscal Compact and it is not known whether at all, and if yes, when Croatia will accede to the Fiscal Compact.

Balanced Budget Rule          
IX.4
Article 3(2) Fiscal Compact prescribes that the Balanced Budget Rules shall take effect in national law through “provisions of binding force and permanent character, preferably constitutional, or otherwise guaranteed to be fully respected and adhered to throughout the national budgetary processes.” How is the Balanced Budget Rule (intended to be) implemented in Croatia? Will there be an amendment of the constitution? If not, describe the relation between the law implementing the Balanced Budget Rule and the constitution. If the constitution already contained a Balanced Budget Rule, describe the possible changes made/required, if any.

In case Croatia becomes a member of the euro area and would decide to become a party to the Fiscal Compact, it would have to amend its Constitution or adopt a constitutional law.

Debate Balanced Budget Rule   
IX.5
Describe the national debate on the implementation of the Fiscal Compact/Balanced Budget Rule, in particular in relation to the implications of the treaty for (budgetary) sovereignty, constitutional law and the budgetary process.

No discussions on that issue can be found.

The repeated question on the implications of the treaty for (budgetary) sovereignty, constitutional law and the budgetary process in case of Croatia can be only answered by pointing out that Croatia will be the new member as of 1 July 2013, and it will accept the rules as they have already been agreed by other Member States. On 1 July, Croatia became eligible to accede to the Fiscal Compact, but it is not known whether at all, and if yes, when Croatia will accede to the Fiscal Compact.

Relationship BBR and MTO     
IX.6
What positions, if any, are taken in the national debate about the relationship between the Balanced Budget Rule of article 3(1)(b) Fiscal Compact and the Medium-term Budgetary Objective (MTO) rule in the Six-Pack (section 1A, article 2a Regulation 1466/97, on which see above question VII.10)?

No evidence on that issue.     

Case law          
IX.7
Is there a (constitutional) court judgment on the Fiscal Compact/implementation of the Balanced Budget Rule?

Not applicable.

Non-Eurozone and binding force    
IX.8
Has Croatia decided to be bound by parts of the Fiscal Compact on the basis of article 14(5) Fiscal Compact already before joining the Euro area, or has this option been debated?

No information on that for Croatia.

Miscellaneous
IX.9
What other information is relevant with regard to Croatia and the Fiscal Compact?

Not applicable.

[1] Official Gazette of Croatia No 139/2010

[2]  http://www.business.hr/ekonomija/hrvatsko-pristupanje-fiskalnom-paktu-eu-super-odluka-ili-vezanje-ruku