Staff Discussion Notes

Reforming Fiscal Governance in the European Union

By Michal Andrle, John C Bluedorn, Luc Eyraud, Tidiane Kinda, Petya Koeva Brooks, Gerd Schwartz, Anke Weber

May 21, 2015

Download PDF

Preview Citation

Format: Chicago

Michal Andrle, John C Bluedorn, Luc Eyraud, Tidiane Kinda, Petya Koeva Brooks, Gerd Schwartz, and Anke Weber. Reforming Fiscal Governance in the European Union, (USA: International Monetary Fund, 2015) accessed November 21, 2024

Disclaimer: This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published to elicit comments and to further debate.

Summary

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.

Subject: Expenditure, Fiscal governance, Fiscal policy, Fiscal stance, Public debt

Keywords: Balance rule, Correction mechanism, Debt, Debt benchmark criterion, Debt correction, European Economic, Expenditure rule, Fiscal Governance, Fiscal Policy, Fiscal Rules, Fiscal stance, Global, Monetary Union, Rule, SDN

Publication Details

  • Pages:

    28

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Staff Discussion Notes No. 2015/009

  • Stock No:

    SDNEA201509

  • ISBN:

    9781498338288

  • ISSN:

    2617-6750

You May Also Be Interested In...

Guidance Note On The Financing Assurances And Sovereign Arrears Policies And The Fund's Role In Debt Restructurings

November 18, 2024

Burkina Faso: Report on Government Finance Statistics Mission (March 18–29, 2024)

November 18, 2024

Islamic Republic of Mauritania: Technical Assistance Project on Public Debt Projections: Scoping Mission Report

November 15, 2024

Growth Convergence and Public Finances of India and its States

November 15, 2024