fiscal rules
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Significance Inflation is lower than in other major EU economies and unemployment is falling, albeit from a high base, as the country approaches presidential elections in April. Impacts Macron’s steady lead in the polls will boost investor confidence ahead of the presidential elections. While Spain is calling on the EU to start treating COVID-19 like influenza, France is unlikely to embrace such thinking until after April. The EU recovery fund and more flexible EU fiscal rules will enable the next government to pursue investment-led growth beyond 2022.


2022 ◽  
pp. 1-14
Author(s):  
Mar Delgado-Téllez ◽  
Esther Gordo ◽  
Iván Kataryniuk ◽  
Javier J. Pérez

2021 ◽  
Vol 1 (1) ◽  
pp. 26-35

Fiscal policymaking of the Member States aims to follow fiscal rules through the economic cycle that ensure macroeconomic sustainability in the European Union (EU). After the 2008 global crisis, the Stability and Growth Pact introduced the enhanced supranational fiscal rules, setting additional boundaries to fiscal deficits and government debt. The new ceiling on the structural deficit in public finance laws of Member States has served to protect creditworthiness. The COVID-19 pandemic, which led to a temporary suspension of the fiscal rules, clearly indicates that the key challenges are to implement a countercyclical policy during upturns, building buffers for bad days. Under the Next Generation Europe’s initiative the European Commission (EC) will borrow up to €750 billion and distribute it over 2021-2024 to Member States (European Commission, 2020a). Raising funds in the EU budget and repayment of the EC debt may lead to amendments to the design and application of the EU fiscal rules. This paper lays out the objectives of the EU current fiscal framework and its main pillars, discusses how the EC new financial instruments for the period 2021-2027 will be accounted for in the Member States’ fiscal framework, and what are its possible changes and challenges after Covid-19 and Brexit.


2021 ◽  
Vol 26 (5) ◽  
pp. 213-228
Author(s):  
Ewa Lotko

Abstract One of the main challenges which legal science faces nowadays is the creation of legal mechanisms guaranteeing sound public finance. The aim of this article is to assess the role of national fiscal rules in maintaining financial stability. Firstly, to fulfil this aim, the role of fiscal rules and their efficiency was analysed. Next, based on the commonly used tool assessing the quality of national fiscal rules – the Fiscal Rule Index – the quality of expenditure rules in the EU countries was analysed in order to evaluate the Polish stabilising expenditure rule and the escape clause of its application. Therefore, the following research question is to be answered: whether in the face of an unstable financial situation of the state connected with an increasing deficit, deviation from the stabilising expenditure rule should be considered as being right. Research methods based on non-reactive research, i.e., analysis of professional literature, legal acts, and statistical data published by the European Commission, were used in this article. Due to this analysis, it was indicated that expenditure rules are regarded as one of the most effective tools to manage public funds, and therefore any derogations from the application of these rules should be evaluated negatively.


2021 ◽  
pp. 6-26
Author(s):  
Vladimir SAGAT ◽  
Milan KRAPEK ◽  
Juraj NEMEC

The importance of high quality public sector control is an obvious fact – without efficient and effective control system, the risk of wasting public funds is critical. The goal of this article was to evaluate efficiency of internal control systems on the level of regional self-administration in the Slovakia. The findings clearly document many problems related to the performance of regional control bodies and on this basis purposes and possible actions are proposed. From the point of view of "fiscal rules", the research, for example, pointed to an exceptionally poor situation in compliance with the rules and conditions of budgetary management in the Bystrica region in the period 2006-2009. The research also proves that one of the key problems of nonconceptual and non-transparent asset management of regions is confusing and disadvantageous asset sales. The quantitative analysis suggests that the efficiency (intensity) of the functioning of regional control systems does not have a direct impact on the monitored output indicators. The implemented DEA also indicates the low effectivity of the internal control systems of the regions. Our findings fully prove that there are no truly efficient systems of external and internal control at the level of self-governing regions in Slovakia. The factor of high autonomy of regions in the financial management and disposal of assets in connection with the identified high degree of failure of the regional control system generates a clear need to strengthen the system of internal control of regions, based on systemic and procedural changes.


Keyword(s):  
Eu Law ◽  

Significance Two of the most pressing issues will be reforms to EU fiscal rules and Poland's challenge to the primacy of EU law.


2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Achim Truger

Abstract Fiscal rules such as the European Stability and Growth Pact and the German debt brake have been suspended in the Covid19-pandemic in order to provide emergency measures and to overcome the crisis. Now, the controversial debate is back again: When should governments return to fiscal rules? Should they return to fiscal rules, at all? This article argues that it is not so much a question whether governments should return to fiscal rules at all, but to which kind of rules they should return. Following the deficit bias argument and the need for fiscal policy coordination in a monetary union some kind of limitation for government debt and some kind of fiscal rules may easily be justified. However, that does not mean that governments should return exactly to the previously existing rules, because these are economically flawed. Recently the argument for reform has become even stronger due to new empirical evidence about the macroeconomic effectivity of fiscal policy, the experience of the dysfunctionality of the existing rules during the Euro crisis and the fact that the cost of public debt has been reduced dramatically because of persistently low if not negative nominal interest rates.


Significance Plans to invest in key areas such as innovation, digitisation and climate change are already under way, as are plans to reform the pension system. Impacts EU fiscal rules will not return until 2023 at the earliest, enabling Draghi to focus on pro-growth strategies. If Draghi becomes president, finding an alternative government may be difficult as some parties will demand early elections. While the polls have narrowed, a right-wing government remains the most plausible outcome after the next general election.


2021 ◽  
pp. 110168
Author(s):  
Juan Carlos Hatchondo ◽  
Leonardo Martinez ◽  
Francisco Roch

2021 ◽  
Vol 19 (4) ◽  
pp. 991-1014
Author(s):  
Ewa Gubernat ◽  
Hanna Kociemska ◽  
Bernadeta Dziedziak ◽  
Leszek Patrzalek

Keeping local government units’ financial stability to run necessary projects is becoming a severe threat due to the remarkable increase of theirs’ debt level. A question arises whether the application of debt limits excessively restrict municipalities’ investment potential. Using the linear regression model, we proved that increasing the maximum allowable debt level decreases investment potential. We have challenged the relevance of using fiscal rules and presented liberalizing the fiscal rules’ principles to assess the investment potential as an indicator to guarantee optimum use of the local government units’ economic potential from different perspectives.


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