Are Member States’ Budgetary Policies Adhering to the EU Fiscal Rules?
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Are Member States’ Budgetary Policies Adhering to the EU Fiscal Rules?
Applied Economics Quarterly, Vol. 66 (2020), Iss. 1 : pp. 47–64
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David Cronin, Central Bank of Ireland, PO Box 559, Dublin 1, Ireland.
Cited By
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Official fiscal forecasts in EU member states under the European Semester and Fiscal Compact – An empirical assessment
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https://doi.org/10.1016/j.ejpoleco.2022.102227 [Citations: 5] -
Government debt forecast errors and the net expenditure rule in EU countries: Undue optimism at a cost
Cronin, David | McQuinn, KieranJournal of Policy Modeling, Vol. 45 (2023), Iss. 6 P.1113
https://doi.org/10.1016/j.jpolmod.2023.10.001 [Citations: 3]
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Abstract
Harmonised data from the 2013 to 2018 Stability and Convergence Programmes (SCPs) are used to assess whether member states are acting to meet EU fiscal requirements and, in particular, their medium-term objectives (MTOs). EU AMECO data are employed to check whether planned fiscal policy, set out in the SCPs, materialises ex-post. The main finding is that planned changes in the fiscal stance aim towards meeting the MTO when that target has not yet been attained but less effort occurs in practice. Member states who have already met their MTO loosen their fiscal stance. The policy message is that, in general, the enhanced, post-crisis EU fiscal framework is delivering budgetary policy that contributes to avoiding excessive deficit and debt positions. The fiscal consolidation actually undertaken, however, is less than planned and the upside of the economic cycle does not see greater effort towards meeting MTOs. Moreover, those member states with prior excessive deficits do not make, nor plan, any additional fiscal effort over other member states also striving to meet their MTO. The policy reaction to the economic cycle is pro-cyclical in nature.
Table of Contents
| Section Title | Page | Action | Price |
|---|---|---|---|
| David Cronin: Are Member States’ Budgetary Policies Adhering to the EU Fiscal Rules? | 1 | ||
| Abstract | 1 | ||
| 1. Introduction | 1 | ||
| 2. Data Selection | 5 | ||
| 3. Econometric Approach | 6 | ||
| 4. Econometric Results | 8 | ||
| 4.1 Baseline Results | 8 | ||
| 4.2 Does Fiscal Behaviour Differ When a Member State Has Met its MTO or Has Not? | 1 | ||
| 4.3 Response to MTO Requirement During the Cycle | 1 | ||
| 4.4 Response to Excessive Deficits | 1 | ||
| 5. Conclusion | 1 | ||
| References | 1 |