Received Wisdom and Beyond: Lessons from Fiscal Consolidation in the EU

2008 ◽  
Author(s):  
Martin Larch ◽  
Alessandro Turrini
Keyword(s):  
Fiscal Consolidation ◽  
The Eu

scholarly journals 1. Europe Needs More Public Investment

2020 ◽  
pp. 17-32
Author(s):  
Rocco Luigi Bubbico ◽  
Philipp-Bastian Brutscher ◽  
Debora Revoltella
Keyword(s):  
Public Investment ◽  
Infrastructure Investment ◽  
Fiscal Consolidation ◽  
Investment Bank ◽  
Government Sector ◽  
Key Factor ◽  
Negative Effect ◽  
The Government ◽  
European Investment ◽  
The Eu

The first part sets the stage, providing trends on public investment in France, Germany, Italy and Spain. It is preceded by an initial chapter by Rocco Luigi Bubbico, Philipp-Bastian Brutscher and Debora Revoltella from the European Investment Bank (EIB) outlining the experience of Europe as a whole. The picture is as follows: between 2008 and 2016 public investment in the EU declined from 3.4% of GDP to 2.7%. Despite a slight rebound in 2017 and 2018, public investment still stands at only 2.9% of GDP, 15% below its pre-crisis levels. Fiscal consolidation pressure was at the core of such decline in public investment especially in countries that experienced a strong pressure to tighten their budgets. The negative effect of fiscal consolidation was in many cases amplified by a re-prioritization of public outlays away from investment towards current expenditures. Infrastructure investment was disproportionately affected by the decline in public investment. EIB estimates show that overall infrastructure investment declined by about 25% between 2008 and 2016, with the government sector accounting for the lion’s share of this fall. From a sectorial perspective, investment in transport and education infrastructure experienced the strongest decline. The chapter clearly documents that the fall in government infrastructure investment does not reflect a saturation effect, the annual infrastructure investment gap is estimated to be about €155 bn and that construction of new infrastructure seems to continue to produce large positive economic spillover effects. This chapter advises, as a policy lesson, sound project selection: preparation and implementation are the keys to reversing the negative trend in investment activities in the EU, besides overcoming funding constraints. Obviously, to ensure the efficient use of available funds, sound infrastructure governance is also a key factor.

scholarly journals Fiscal consolidation in the EU-28: Multiyear versus cold-shower episodes

2020 ◽  
Vol 22 (1) ◽  
pp. 17-30
Author(s):  
Olgica Glavaški ◽  
Emilija Beker-Pucar
Keyword(s):  
Fiscal Consolidation ◽  
The Eu

Supporting health systems in Europe: added value of EU actions?

2013 ◽  
Vol 9 (1) ◽  
pp. 49-69 ◽  
Author(s):  
Timo Clemens ◽  
Kai Michelsen ◽  
Helmut Brand
Keyword(s):  
Health System ◽  
Health Systems ◽  
Added Value ◽  
Policy Agenda ◽  
Care Provision ◽  
Fiscal Consolidation ◽  
Patient Mobility ◽  
Efficient Care ◽  
Eu Support ◽  
The Eu

AbstractSince the start of the economic crisis, the European Union's (EU's) predominant discourse has been austerity and fiscal consolidation. The detrimental effects on Europe's health systems and the health status of its citizens are well described. However, little is known about the emerging EU-level initiatives to support national health systems handle the challenges of efficient care provision and system reorganisation aimed to meet their future needs. This review analyses the manner, conditions and prospects of such EU support. First, health system objectives are increasingly entering the EU health policy agenda. Second, professional and patient mobility provisions may support member states (MS) in copying with crisis related health challenges but can potentially acerbate them at the same time. Third, in recent initiatives health system goals are more closely tied to the EU's economic growth narrative. And fourth, health system issues are taken up in existing EU-level structures for debate and exchange between MS. In addition, the design of some policies may have the potential to intensify socioeconomic and health inequalities rather than ameliorate them.

Rising Public Debt and the Need for Fiscal Consolidation in Europe

2010 ◽  
Vol 211 ◽  
pp. F27-F37
Keyword(s):  
European Union ◽  
Euro Area ◽  
Public Debt ◽  
Economic Activity ◽  
Negative Impact ◽  
The European Union ◽  
Fiscal Consolidation ◽  
The Third ◽  
Positive Growth ◽  
The Eu

The deepest, longest and most broadly-based recession the European Union has ever experienced appears to have come to an end. The third quarter of 2009 saw GDP in the EU increase by 0.3 per cent and economic activity in the Euro Area rose by 0.4 per cent. The recovery is expected to be broadly based across countries. After deep contractions registered in 2009 in all members of the EU (with the exception of Poland), all but four EU economies are expected to have recorded some growth in the second half of 2009. Greece, Ireland, Spain and Latvia suffered more than other EU economies, due to their intrinsic vulnerabilities, which reinforced the negative impact of the global shock. These economies are expected to record only moderate positive growth in 2011.

scholarly journals AN OVERVIEW OF FISCAL CONSOLIDATION PROCESS IN THE EUROPEAN UNION

2014 ◽  
Author(s):  
Iulia Andreea Bucur ◽  
Mircea Muntean
Keyword(s):  
Sovereign Debt ◽  
The European Union ◽  
Fiscal Consolidation ◽  
Consolidation Process ◽  
Fiscal Effort ◽  
Eu Countries ◽  
Eu Member States ◽  
The Impact ◽  
The Eu

This paper aims to explore, based on theoretical and empirical research in the field and on data available on Eurostat and European Commission, in the context of financial significant imbalances and thus of the financial stress in the EU countries and especially in the Euro area, the main developments in the fiscal consolidation process given the fiscal effort of each country towards fiscal union. Since the financial crisis started in 2008, many EU Member States demonstrates an obvious macroeconomic imbalance which requires increased responsibility regarding fiscal developments. The impact of the crisis and the causes of sovereign debt high levels trends varied between EU countries as well as the budget deficit levels. Thus, the main priority for EU members must be the continuation of differentiated fiscal consolidation, given the specificities of each economy, favoring growth. The medium-term fiscal policy needs to focus on consolidating public finances along with restoring long-term sustainability.

Received Wisdom and Beyond: Lessons from Fiscal Consolidation in the EU

2011 ◽  
Vol 217 ◽  
pp. R1-R18 ◽  
Author(s):  
Martin Larch ◽  
Alessandro Turrini
Keyword(s):  
Great Recession ◽  
Structural Reforms ◽  
Fiscal Consolidation ◽  
Public Finances ◽  
Eu Countries ◽  
The Great Recession ◽  
Shed Light ◽  
Over Time ◽  
The Eu

Restoring sustainable public finances in the aftermath of the Great Recession is a key challenge in most EU countries. In order to learn from history, our paper examines consolidation episodes in the EU since 1970. We shed light on the factors that favour the start of a consolidation episode and determine its success. Compared to the existing literature, we add a number of new dimensions in the analysis. First, we explore a broader set of potential ingredients of the ‘recipe for success‘, including the quality and strength of fiscal governance and the implementation of structural reforms. Secondly, we check whether the ‘recipe for success’ changed over time. Our analysis broadly confirms received wisdom concerning the conditions triggering a consolidation episode and the role of the composition of adjustment for success, with some qualifications related to the role played by government wages. In addition it provides evidence that well-designed fiscal governance as well as structural reforms improve the odds of both starting a consolidation episode and achieving a lasting fiscal correction. We also show that, over time, successful and unsuccessful consolidation episodes have become more similar in terms of adjustment composition.

Policy responses to the Eurozone crisis: A comparative analysis of southern European administrations

2018 ◽  
Vol 35 (3) ◽  
pp. 289-311 ◽  
Author(s):  
Manto Lampropoulou
Keyword(s):  
Public Administration ◽  
External Factor ◽  
Eurozone Crisis ◽  
Fiscal Consolidation ◽  
Policy Responses ◽  
Administrative Change ◽  
Administrative Tradition ◽  
The Impact ◽  
The Relationship ◽  
The Eu

The Eurozone crisis has worked as a forceful external factor for activating a series of fiscal and structural adjustments in the countries of the EU periphery. Public administration was a key reform area and has undergone notable transformations under the fiscal consolidation programmes. This paper aims at identifying the impact of the crisis on public administration with a focus on southern Europe. It reviews and compares the goals and the outcomes of the administrative reform programmes that were implemented in Greece, Italy, Portugal and Spain during the crisis. This cluster forms a distinct administrative paradigm emanating from the Napoleonic state tradition. The relationship between administrative tradition and administrative change or persistence is explored in a historical institutionalist perspective. The findings identify similarities, divergences and variations across and within the Southern countries, also suggesting that while certain changes occurred, the Napoleonic features of the southern administrations remained largely untouched by the reform programmes.

scholarly journals Balkan Candidate Countries Running for Fiscal Consolidation: Legal Frameworks vs. Economic Results

2019 ◽  
Vol 22 (3) ◽  
pp. 7-23
Author(s):  
Aleksandra Maksimovska Stojkova ◽  
Elena Nesovska Kjoseva ◽  
Irena Stojmenovska
Keyword(s):  
Fiscal Rules ◽  
The Political ◽  
The European Union ◽  
Fiscal Consolidation ◽  
Member States ◽  
Fiscal Compact ◽  
Balkan Countries ◽  
Economic Developments ◽  
Legal Frameworks ◽  
The Eu

The subject of this paper is four Balkan countries (Albania, Serbia, Macedonia, and Montenegro) that are determined to join the European Union. More particularly, it looks at their work towards accomplishing the political, legal and economic requirements for the EU. Thus, the legislation with the EU Fiscal Compact is the prime focus. Methodologically, the research is based on an assessment of fiscal and monetary legal documents, evaluating the stages of accomplishing the harmonization with the EU’s conditions. Further, cross‑section analyses are made by in putting selected indicators; additionally, the authors compare the four countries’ achievements. The EU’s rigorous fiscal rules are being quietly bypassed, but more frequently by existing member states than the candidate states; this statement is founded on legal and economic arguments, with mathematical estimations. Consequently, the authors question the political courage and financial capacity of the examined countries to cope with the fiscal compact of the superior EU 28 members. The answers are supported with numerous analyses of EU Reports for each country, as well as tables and figures that compare the states’ results and economic achievements vs. EU fiscal consolidation rules. The EU 28 average is givenin addition as a comparison. The conclusion gives across analysis between the four countries and the EU 28 member states, with accompanying argumentation to the main statement about the legal and economic developments of the examined Balkan countries as well as a future prognosis.

scholarly journals Economic disintegration of the European Union: Not unavoidable, but probable

2016 ◽  
Vol 66 (s1) ◽  
pp. 49-60 ◽  
Author(s):  
Leon Podkaminer
Keyword(s):  
Output Growth ◽  
Economic Policies ◽  
The European Union ◽  
Negative Consequences ◽  
Common Currency ◽  
Fiscal Consolidation ◽  
Eu Member States ◽  
The Common ◽  
State Of Affairs ◽  
The Eu

It is argued that European integration has not fulfilled its chief economic promises. Output growth has been increasingly weak and unstable. Productivity growth has been following a decreasing trend. Income inequalities, both within and between the EU member states, have been rising. This sorry state of affairs is likely to continue — and likely to precipitate further exits, or eventually, the dissolution of the Union. However, this outcome is not unavoidable. A better integration in the EU is possible, at least in theory. Also, the negative consequences implicit in the existence of the common currency could be neutralised. However, the basic paradigms of the economic policies to be followed in the EU would have to be radically changed. First, the unconditional fiscal consolidation provisions still in force would have to be repelled. Second, “beggar-thy-neighbour” (or mercantilist) wage policies would have to be “outlawed”.

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