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The path to the reformed EU fiscal framework: a monetary policy perspective

Author

Listed:
  • Haroutunian, Stephan
  • Bańkowski, Krzysztof
  • Bischl, Simeon
  • Bouabdallah, Othman
  • Hauptmeier, Sebastian
  • Leiner-Killinger, Nadine
  • O'Connell, Marguerite
  • Oleaga, Iñigo Arruga
  • Abraham, Laurent
  • Trzcinska, Agnieszka

Abstract

This paper reviews the main arguments underpinning the reform of the EU’s fiscal framework, which has culminated in the adoption by the EU legislators of a revised set of rules for the European economic governance including the Stability and Growth Pact (SGP). It takes a chronological approach by first discussing the Commission’s legislative proposals of April 2023 against the pre-reform set of fiscal rules, before assessing the final political agreement which has materialised in the revised set of rules. In view of the multi-dimensional reform outcome, it is argued that the success of the reform of the fiscal framework will ultimately depend on its future implementation by the Commission and the Council. Combining the reform of the fiscal rules with better fiscal coordination through the establishment of a permanent euro area fiscal capacity was not proposed in the context of this reform. This paper argues that completing the architecture of Economic and Monetary Union (EMU) is an important missing element and should remain a policy priority. JEL Classification: H6, H11, H50

Suggested Citation

  • Haroutunian, Stephan & Bańkowski, Krzysztof & Bischl, Simeon & Bouabdallah, Othman & Hauptmeier, Sebastian & Leiner-Killinger, Nadine & O'Connell, Marguerite & Oleaga, Iñigo Arruga & Abraham, Laurent , 2024. "The path to the reformed EU fiscal framework: a monetary policy perspective," Occasional Paper Series 349, European Central Bank.
    • Handle: RePEc:ecb:ecbops:2024349
    Note: 343309
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    More about this item

    Keywords

    Economic and Monetary Union (EMU); fiscal rules; Stability and Growth Pact (SGP);
    All these keywords.

    JEL classification:

    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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