Definition of stability and growth pact

This is the EU's fiscal rulebook, intended primarily to maintain discipline in the public finances of eurozone member-states. The pact sets a limit for government budget deficits of 3 per cent of gross domestic product in normal times. 

The European Commission acts as the guardian of the pact and can recommend that governments take specific policy measures to bring their deficits under control. Governments that repeatedly violate the pact and ignore the recommendations can be subject to fines, but only with the approval of EU member-states. No country has ever been fined since the euro's launch in 1999. [1]

The rulebook was drawn up in the 1990s for eurozone members as an alternative to fiscal union. [2]

Q&A: Club is reluctant to punish its members