The need to secure budgetary discipline in stage 3 of economic and monetary union has been a key element of the preparatory work at the level of the European Union in recent years.
Article 103 of the Treaty on European Union provides for the adoption by the Council of recommendations on the broad guidelines for the economic policies of the member states and the Union. In December 1993 the first such guidelines, which were adopted by ECOFIN following discussion at the European Council, envisaged that, in the long term, member states' budgetary policies would be directed towards contributing to higher national savings and investment and that this would entail much lower budget deficits, "perhaps close to balance by 2000". In July, 1995 the broad economic guidelines adopted by ECOFIN repeated the goal, which they now referred to as a medium-term one, of bringing budget deficits "close to balance". They noted that, in some countries, the structure of the pension system calls for surpluses in the public accounts.
