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European fiscal policies under the stability pact - some first insights

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  • Lehment, Harmen

Abstract

EU Member countries have shown different degrees of ambition to reach a budget position of ?close to balance or in surplus'. Differences in ambition can only partly be explained by the relative size of cyclical safety mar­gins or differences in the number of votes in the ECOFIN Council. It is also shown that in the medium run there is no evidence for a trade-off between budget consolidation and growth. Of the eight countries with the strongest reduction of structural budget deficits in the period 1992-2001, only one showed growth rates below the EU average. The other seven countries even managed to achieve higher growth rates than in the period 1974-91 during which structural deficits had increased.

Suggested Citation

  • Lehment, Harmen, 2002. "European fiscal policies under the stability pact - some first insights," Kiel Working Papers 1098, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:1098
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    File URL: https://www.econstor.eu/bitstream/10419/2729/1/kap1098.pdf
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    References listed on IDEAS

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    1. Michael J. Artis & Marco Buti, 2000. "‘Close‐to‐Balance or in Surplus’: A Policy‐Maker's Guide to the Implementation of the Stability and Growth Pact," Journal of Common Market Studies, Wiley Blackwell, vol. 38(4), pages 563-591, November.
    2. Alberto Alesina & Roberto Perotti, 1997. "Fiscal Adjustments in OECD Countries: Composition and Macroeconomic Effects," IMF Staff Papers, Palgrave Macmillan, vol. 44(2), pages 210-248, June.
    3. Barry Eichengreen & Charles Wyplosz, 1998. "The Stability Pact: more than a minor nuisance?," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 13(26), pages 66-113.
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    Cited by:

    1. Tilman Brück & Andreas Cors & Klaus F. Zimmermann & Rudolf Zwiener, 2002. "Stability Criteria and Convergence: The Role of the System of National Accounts for Fiscal Policy in Europe," Discussion Papers of DIW Berlin 318, DIW Berlin, German Institute for Economic Research.
    2. Boss, Alfred & Scheide, Joachim, 2002. "Budgetausgleich in Deutschland im Jahr 2004?," Open Access Publications from Kiel Institute for the World Economy 2855, Kiel Institute for the World Economy (IfW Kiel).
    3. Nicolas Afflatet, 2017. "Deficit Policy within the Framework of the Stability and Growth Pact: An Empirical Analysis," Applied Economics and Finance, Redfame publishing, vol. 4(2), pages 76-86, March.

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    More about this item

    Keywords

    budget deficits; European Union; fiscal policy;
    All these keywords.

    JEL classification:

    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination

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