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Reforming Fiscal Governance in the European Union
Author:
Michal Andrle null

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Mr. John C Bluedorn
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Luc Eyraud
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Mr. Tidiane Kinda
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Ms. Petya Koeva Brooks
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Mr. Gerd Schwartz
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Miss Anke Weber
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Series:
Staff Discussion Notes
Volume/Issue:
Volume 2015: Issue 009
Language:
English
Publication Date:
21 May 2015
DOI:
https://doi.org/10.5089/9781498338288.006
ISBN:
9781498338288
ISSN:
2617-6750
Pages:
28
Keywords:
SDN; expenditure rule; rule; debt correction; debt; Fiscal Governance; Fiscal Policy; Fiscal Rules; European Economic; Monetary Union; correction mechanism; balance rule; debt benchmark criterion; Fiscal stance; Global
Legal-disclaimer:
Staff Discussion Notes (SDNs) showcase policy-related analysis and research being developed by IMF staff members and are published to elicit comments and to encourage debate.The views expressed in this Policy Discussion Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy.
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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.
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Cover Staff Discussion Notes
Staff Discussion Notes
ISSN:
2617-6750
Publisher:
International Monetary Fund