UPSC Prelims 2023 · Question 69 of 97

UPSC Prelims 2023 question on Stability and Growth Pact

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
Show answer

Answer: A. Only one

Verdict

Only statement 1 is correct → Option (a) Only one.

Analysis

The Stability and Growth Pact (SGP) is a set of rules designed to ensure that countries in the European Union pursue sound public finances and coordinate their fiscal policies. Described as the Eurozone's fiscal rulebook, the SGP is a set of fiscal rules designed to prevent EU countries from spending beyond their means.

Statement by statement

Statement 1 – CORRECT: Since 1997, member states have agreed that they should keep GDP ratios of deficit and debt below 3% and 60% respectively — the SGP limits budgetary deficits of EU countries.

Statement 2 – INCORRECT: The SGP does not make countries of the European Union share their infrastructure facilities.

Statement 3 – INCORRECT: The SGP does not make countries of the European Union share their technologies.

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