Enforcement and the Stability and Growth Pact: How Fiscal Policy Did and Did Not Change Under Europe’s Fiscal Framework
May 1, 2006
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Summary
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.
Subject: Fiscal governance, Fiscal policy, Fiscal rules, Fiscal stance, Output gap
Keywords: area country, commitment country, SGP counterpart, SGP era, SGP period, SGP rule, WP
Pages:
34
Volume:
2006
DOI:
Issue:
116
Series:
Working Paper No. 2006/116
Stock No:
WPIEA2006116
ISBN:
9781451863765
ISSN:
1018-5941
