Q. Consider the following statements :

1. The 'Stability and Growth Pact' of the European Union is a treaty that 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? (UPSC Prelims 2023)
Answer: Only one
Notes: The correct answer is [A] Only one. This question examines the specific fiscal framework governing the Eurozone and European Union member states.

• Statement 1 (Correct): The Stability and Growth Pact (SGP) is a set of fiscal rules designed to ensure that countries in the European Union pursue sound public finances and coordinate their fiscal policies. It specifically limits the budgetary deficit to 3% of GDP and the public debt to 60% of GDP. It consists of a "preventive arm" and a "corrective arm" (the Excessive Deficit Procedure).
• Statement 2 (Incorrect): The SGP is strictly a fiscal and monitoring agreement. It does not mandate or facilitate the physical sharing of infrastructure facilities between member states. Infrastructure cooperation in the EU is handled through other frameworks, such as the Trans-European Transport Network (TEN-T).
• Statement 3 (Incorrect): Similarly, the SGP does not deal with technology transfer or sharing. Technological cooperation is managed through initiatives like Horizon Europe or the Digital Europe Programme, rather than a pact focused on budgetary discipline.

The SGP was established in 1997 to maintain the stability of the Economic and Monetary Union (EMU) and the Euro. While it was suspended during the COVID-19 pandemic and the energy crisis, its core focus remains the sustainability of government debt and deficits.