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EU Toughens Fiscal Pact, Bowing to ECB Concerns, Draft Shows

European Union governments set tougher rules on budget deficits in the latest draft of a planned fiscal treaty, bowing to some objections raised by the European Central Bank.

The blueprint, to be discussed on Jan. 23 by EU finance ministers, will require a centralized “correction mechanism” to be triggered “automatically” in cases of “significant” deviations from a target structural deficit of 0.5 percent of gross domestic product, according to the draft dated Jan. 19 obtained by Bloomberg News.