Czech Republic moves forward to accepting European Union's fiscal compact

The Czech parliament's lower house ratified joining the European Union's fiscal compact on Thursday, inching closer to adopting the treaty -- the last EU state to do so besides Britain, which is leaving the union in five months.

The pact puts a lid on national deficits and debt to protect the euro. Although the Czech Republic has not adopted the single currency, the country has long met the pact's fiscal targets.

In the 200-seat lower house, 106 lawmakers voted in favour of ratification, 43 against and the rest were absent or abstained.

The compact requires countries to keep their budget in balance or surplus with a structural deficit below 0.5 per cent of the gross domestic product under normal conditions.

Like other non-euro members, the Czech Republic will not have to adopt clauses containing penalties for missing the fiscal targets. Those would apply only if the country adopts the single currency.

A past Czech government approved the fiscal compact in 2014, and it was ratified in the upper house of parliament the same year, but it had not passed the lower house.

A previous cabinet approved the pact in February and at the same time changed its procedure to require only a simple majority for approval in the lower house. Previously, a three-fifths majority was required in both houses.

A simple-majority approval means the pact carries less weight in the Czech legal system because it is not considered part of the constitutional framework.

Because of the change in procedure, the upper house of parliament, the Senate, will have the vote on the pact again.

(With inputs from agencies.)