Download or read book Reforming Fiscal Governance in the European Union written by Michal Andrle and published by International Monetary Fund. This book was released on 2015-05-21 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: Successive reforms have brought many positive elements to the European Union’s fiscal framework. But they have also increased its complexity. The current system involves an intricate set of fiscal constraints, which hampers effective monitoring and public communication. Compliance has also been weak. This note discusses medium-term reform options to simplify the framework and improve compliance. Based on model simulations and practical considerations, it argues for moving to a two-pillar approach, with a single fiscal anchor (public debt-to-GDP) and a single operational target (an expenditure growth rule, possibly with an explicit debt correction mechanism) linked to the anchor.
Download or read book Reforming Fiscal Governance in the European Union written by and published by . This book was released on 2015 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: Successive reforms have brought many positive elements to the European Union's fiscal framework. But they have also increased its complexity. The current system involves an intricate set of fiscal constraints, which hampers effective monitoring and public communication. Compliance has also been weak. This note discusses medium-term reform options to simplify the framework and improve compliance. Based on model simulations and practical considerations, it argues for moving to a two-pillar approach, with a single fiscal anchor (public debt-to-GDP) and a single operational target (an expenditure growth rule, possibly with an explicit debt correction mechanism) linked to the anchor.
Download or read book Playing by the Rules written by Luc Eyraud and published by International Monetary Fund. This book was released on 2015-03-24 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper contributes to the discussions on fiscal governance in Europe. It takes stock of recent reforms, identifies areas for further progress, and discusses a menu of policy options for the medium-term. The issues covered include: (i) the growing complexity of the European framework and ways to simplify it; (ii) the difficulties to measure and implement structural stance indicators; (iii) the challenge of reconciling fiscal sustainability and growth; (iv) the need to enhance coordination in the area of monitoring; and (v) the obstacles to compliance and proposals to strengthen enforcement.
Download or read book EU Fiscal Governance and the Effectiveness of Its Reform written by Alexandre de Streel and published by . This book was released on 2014 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyses the reforms of the fiscal governance in the Euroopean Union introduced after the euro crisis. The first section is descriptive and gives a brief overview of the new fiscal governance as modified by the six-pack, the TSCG and the two-pack. The second section is critical and analyses the weaknesses of the original fiscal governance and the effectiveness of the recent reforms. The third section briefly concludes. Originally in 1992, the EU fiscal governance was based on fiscal decentralisation constrained by rules (limits of 3% government deficit and 60% government debt) whose compliance was monitored annually and whose violation are sanctioned (the excessive deficit procedure). The financial solidarity was minimal. The Euro crisis and the high financial instability of some Member States have shown the severe flaws of such governance model: the fiscal rules were sometimes inappropriate and often poorly implemented. Inevitably then, the crisis led to more financial solidarity than expected. To remedy those flaws, the EU fiscal governance has been substantially reformed by the six-pack in 2011, the TSCG in 2012 and the two-pack in 2013. Such reforms, which were probably the only politically feasible, have improved the three components of the governance: on rules, they make the fiscal objectives and limits smarter; on institutions, they improve the quality of data and forecasts needed to apply properly the rules, and ensure a better national ownership; on enforcement, they improve the design and the decision-making process of the sanctions at the EU level and create an national correction mechanism. All of that could still be fine-tuned: the fiscal rules could better differentiate between productive and less productive public investment, a network of the Commission and the newly established national fiscal councils could be set up, and the decision-making process and the criteria used by the Commission in proposing the sanctions could be made more transparent. But more fundamental reforms are needed to ensure the sustainability of the EMU. The legitimacy of the new EU surveillance and sanctions tools should be improved in several ways: explaining better the rationale for the constitutionalization of the fiscal rules, enhancing dialogue between EU and national bodies (economic dialogue ...) as well as among national institutions (parliament, IFCs ..), increasing the EU parliamentary oversight where the Commission power have been enhanced. Other models of governance may also be developed. The sticks of the fiscal governance (sanctions) should be complemented with carrots (financial incentives). More centralisation of fiscal policy could be ensured with the creation of a Eurozone budget to absorb asymmetric macro-economic shocks or the issuance of common Eurobonds. Those reforms may be difficult to agree today, but the risk is that the fatigue of the citizens towards the European Union, of which the economic governance is one of the most visible parts, and the rise of nationalism within the Member States will make any reform even more difficult tomorrow.
Download or read book Building a Better Union written by Angana Banerji and published by International Monetary Fund. This book was released on 2015-09-11 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: The momentum for structural reforms is waning in the euro area at a time when even faster progress is needed to boost productivity and growth, achieve real economic convergence, and improve the resilience of the monetary union. What can the European Union (EU) institutions do to bridge this divide? This paper argues for greater simplicity, transparency and accountability in the EU governance framework for structural reforms. Our three interrelated proposals—“outcome-based” benchmarking; better use of existing EU processes to strengthen oversight and reduce discretion; and improved financial incentives—could help advance reforms. Ex post monitoring by an independent EU-level “structural council” and ex ante policy innovation by national productivity councils could strengthen accountability and ownership. Deeper governance reforms should be considered in the medium-term with a view toward a greater EU role in promoting convergence.
Download or read book The Pursuit of Stability of the Euro Area as a Whole written by Luca Lionello and published by Springer Nature. This book was released on 2019-10-14 with total page 243 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book analyses the ongoing reform of the European economic union in the light of the new objective of ‘stability of the euro area as a whole’ in Article 136(3) TFEU. On the basis of the relevant legal sources, it qualifies this objective as the obligation to preserve the existence of the monetary union, the establishment of which was an EU goal laid down in Article 3(4) TEU. While to date the objective has been achieved through fiscal and macroeconomic consolidation in the member states and the activation of stabilisation mechanisms in cases of emergency, the book argues that full stability requires a better system of economic governance, either through a process of partial fiscal centralisation or the return to a more efficient and sustainable market discipline of public finances. It also analyses the concrete legal challenges these raise, including compliance with the conferral principle, the longstanding democratic deficit of the governance and the balance between financial solidarity and fiscal responsibility.
Download or read book Enforcement and the Stability and Growth Pact How Fiscal Policy Did and Did Not Change Under Europe s Fiscal Framework written by Anthony Annett and published by International Monetary Fund. This book was released on 2006-05 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Stability and Growth Pact has been a success in numerous EU countries, especially in guiding them toward underlying fiscal balance ahead of population aging. These countries tend to be smaller, subject to greater macroeconomic volatility, and reliant on a form of fiscal governance that emphasizes targets and contracts. Most of the new members share these characteristics. For the countries less compatible with the Pact, domestic governance reforms that increase the reputational costs for noncompliance can be useful complements to the fiscal framework.
Download or read book Reforming the EU Fiscal Framework written by Mr. Nathaniel G Arnold and published by International Monetary Fund. This book was released on 2022-09-05 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: The EU’s fiscal framework needs reform. While existing fiscal rules have had some impact in constraining deficits, they did not prevent deficits and debt ratios that have threatened the stability of the monetary union in the past and that continue to create vulnerabilities today. The framework also has a poor track record at managing trade-offs between containing fiscal risks and stabilizing output. Finally, the framework does not provide sufficient tools for EU-wide stabilization. This was most visible during the decade following the euro area sovereign debt crisis, when structurally low real interest rates stretched the policy tools of the European Central Bank (ECB), leading to a persistent undershooting of its inflation target. This paper proposes a new framework based on risk-based EU-level fiscal rules, strengthened national institutions, and a central fiscal capacity. First, risk-based EU-level fiscal rules would link the speed and ambition of fiscal consolidation to the level and horizon of fiscal risks, as identified by debt sustainability analysis (DSA) using a common methodology developed by a new and independent European Fiscal Council (EFC). The 3 percent deficit and 60 percent debt reference values would remain. Second, all member countries would be required to enact medium-term fiscal frameworks consistent with the EU-level rules—that is, to ensure convergence over the medium-term to an overall fiscal balance anchor by setting expenditure ceilings. Independent national fiscal councils (NFCs) would have a much stronger role to strengthen checks and balances at the national level (including undertaking or endorsing macroeconomic projections and performing DSAs to assess fiscal risks). The European Commission (EC) would continue to play its key surveil¬lance role as articulated in the Maastricht Treaty and the EFC would be the center of a peer network of fiscal councils. Third, building on the recent experience with the NextGenerationEU (NGEU), an EU fiscal capacity (FCEU) would improve euro area macroeconomic stabilization and allow the provision of common EU public goods—a task that has become more urgent given the green transition and common security concerns. Central to the proposal is a mutually reinforcing relationship between EU rules and national-level imple¬mentation. Strengthening implementation requires both better national ownership of the rules and their application and greater congruence of national-level frameworks with EU-level rules. The former can only be achieved by rules that convincingly balance the needs of members with the avoidance of negative externali¬ties across members. This argues for a risk-based approach—the first pillar of our proposal. The latter requires a stronger role for significantly upgraded national level frameworks—the second pillar of our proposal.
Download or read book EU Fiscal Rules written by and published by . This book was released on 2021 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper discusses the EU fiscal framework reform. It reviews the EU fiscal governance history and reforms, and identifies key challenges. It then takes stock of reform proposals made so far, and finally formulates a reform idea that reconciles the post-pandemic macroeconomic context with existing contributions by leading economists and institutions.
Download or read book Reforming Fiscal Governance in the European Union written by Michal Andrle and published by International Monetary Fund. This book was released on 2015-05-21 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: Successive reforms have brought many positive elements to the European Union’s fiscal framework. But they have also increased its complexity. The current system involves an intricate set of fiscal constraints, which hampers effective monitoring and public communication. Compliance has also been weak. This note discusses medium-term reform options to simplify the framework and improve compliance. Based on model simulations and practical considerations, it argues for moving to a two-pillar approach, with a single fiscal anchor (public debt-to-GDP) and a single operational target (an expenditure growth rule, possibly with an explicit debt correction mechanism) linked to the anchor.
Download or read book Domestic Budgets in a United Europe written by Mark Hallerberg and published by Cornell University Press. This book was released on 2004 with total page 268 pages. Available in PDF, EPUB and Kindle. Book excerpt: Under European Monetary Union, member states lose the ability to steer their economies by manipulating monetary policy. Domestic Budgets in a United Europe, which explains the content, evolution, and effectiveness of fiscal institutions, will be the definitive account of European budget reform in the late twentieth century.Mark Hallerberg examines the making of budgets in EU countries from 1973 to 2000 and explores why those countries introduced fiscal rules when they did. In 1993, when the fiscal-policy criteria for monetary union were first announced, only Luxembourg and the Republic of Ireland would have qualified. In 1997, only Greece failed. Various explanations have been advanced for this rapid turnaround, including luck (a favorable economic climate reduced pressures on local budgets), accounting tricks, and the increasing pressures caused by international capital mobility. Underlying these various explanations is a basic skepticism about whether countries in the European Union actively worked to reform their national budgeting procedures. In rich case studies, Hallerberg shows that the member-states did indeed reform their budget institutions. Many of them, he finds, had started that process long before the formal signing of the Maastricht Treaty of 1991, making domestic changes that allowed them to qualify individually under EMU criteria.
Download or read book Making Sense of the European Commission s Fiscal Governance Reform Plan written by Lucio R. Pench and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The European Commission's April 2023 proposals for the reform of European Union fiscal governance revolve around the principles of fiscal sustainability and national ownership. While the criterion of sustainability is at the centre of the proposals, its practical implications for the assessment of compliance of national medium-term fiscal-structural plans with the new fiscal rules have been blurred by a proliferation of additional criteria or safeguards. These include a requirement for a country's debt level at the end of the medium-term horizon to be lower than at the beginning. This Policy Brief argues that the fiscal sustainability criterion, which the legislative proposals formulate in broad qualitative terms (public debt being on "a plausibly downward path ... or ... staying at prudent levels") can be operationalised to ensure the objective of de-risking of public debt, ie the eventual removal of situations in which debt poses a high sustainability risk. Specifically, for a plan to satisfy the sustainability criterion, it should ensure that the country in question graduates out of the high-risk category or does not fall into it. It is further argued that the additional criteria or safeguards have limited value added and hamper the overall readability of the proposed reform. This proliferation of criteria should not be taken as compromising the fundamentals of the reform, however: a careful textual and contextual reading of the relevant legal provisions allows for an 'overall assessment' by the Commission and the Council of the medium-term plans submitted by EU countries, in which compliance with the additional safeguards could be given a subordinated role relative to the sustainability criterion. Ideally, a clarification of the methodology for assessing compliance with the debt-sustainability criterion would allow the additional safeguards to be dispensed with. Political concerns lay behind the demand for additional safeguards, but these should be addressed through institutional rather than rule-based solutions. Implementation and enforcement will be critical. This Policy Brief offers proposals to enhance institutional self-commitment to implementation, with reputational consequences for non-implementation.
Download or read book European Economic Governance written by Fabio Masini and published by Springer Nature. This book was released on 2022-10-08 with total page 165 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book examines the economic theories and policies that underline the governance of the European Union. Through exploring the history of European economic governance and how this framework has evolved over time, it contextualises theoretical influences, policy debates surrounding the European Union and its instruments of governance, including the European Semester, Six Pack, Two Pack, and Fiscal Compact. Forthcoming reforms to fiscal rules and the economic policy architecture of the European Union are also discussed, with a particular focus on the impact of the COVID-19 pandemic. This book aims to give readers a broad understanding of the framework and dynamics that define European economic governance. It will be relevant to researchers and policymakers interested in the European political economy.
Download or read book Legal Foundations of EU Economic Governance written by Antonio Estella de Noriega and published by Cambridge University Press. This book was released on 2018-09-06 with total page 289 pages. Available in PDF, EPUB and Kindle. Book excerpt: A critical analysis of the legal dimension of European Union economic governance.
Download or read book National Fiscal Governance Reforms Across EU Member States written by Joaquim Ayuso-i-Casals and published by . This book was released on 2010 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recoge: Overview of the information contained in the 2009-2010 SCPs - Type of measures according to the main elements of domestic frameworks - The assessment of domestic fiscal frameworks reforms by the Commission - Annex: Country specific information based on the 2009-2010 SCPs.
Download or read book Fiscal Governance in Europe written by Mark Hallerberg and published by Cambridge University Press. This book was released on 2009-03-16 with total page 235 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book presents a theoretical framework to discuss how governments coordinate budgeting decisions. There are two modes of fiscal governance conducive to greater fiscal discipline, a mode of delegation and a mode of contracts. These modes contrast with a fiefdom form of governance, in which the decision-making process is decentralized. An important insight is that the effectiveness of a given form of fiscal governance depends crucially upon the underlying political system. Delegation functions well when there are few, or no, ideological differences among government parties, whereas contracts are effective when there are many such differences. Empirically, delegation and contract states perform better than fiefdom states if they match the underlying political system. Additional chapters consider why countries have the fiscal institutions that they do, fiscal governance in Central and Eastern Europe, and the role of such institutions in the European Union.
Download or read book Europe s Future written by Sergio Fabbrini and published by Cambridge University Press. This book was released on 2019-03-14 with total page 183 pages. Available in PDF, EPUB and Kindle. Book excerpt: Sergio Fabbrini proposes a way out of the EU's crises, which have triggered an unprecedented cleavage between 'sovereignist' and 'Europeanist' forces. The intergovernmental governance of the multiple crises of the past decade has led to a division on the very rationale of Europe's integration project. Sovereignism (the expression of nationalistic and populist forces) has demanded more decision-making autonomy for the EU member states, although Europeanism has struggled to make an effective case against this challenge. Fabbrini proposes a new perspective to release the EU from this predicament, involving the decoupling and reforming of the EU: on the one hand, the economic community of the single market (consisting of the current member states of the EU and of others interested in joining or re-joining it); and on the other, the political union (largely based on the eurozone reformed according to an original model of the federal union).
