eu and national fiscal rules an overview · 2019. 3. 26. · national fiscal rules overview note:...
TRANSCRIPT
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EU and national fiscal rules:
an overview
Public Finance Network Conference
14th March 2019 © Elva Bova, 2019. All rights reserved.
Elva Bova
DG ECFIN, Fiscal Governance Unit
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Introduction
Fiscal rules overview
Main design features
Possible tensions and consistency
Open questions
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Fiscal rules overview
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EU fiscal rules overview
The EU rules, a reminder…
Budget balance rule
• 3% of GDP reference value (SGP 1997)
• Structural balance (SGP reform 2005)
Expenditure rule
• Expenditure benchmark (Six Pack 2011)
Debt rule
• 60% of GDP reference value (SGP 1997)
• Debt reduction benchmark (Six Pack 2011)
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When were rules adopted?
Source: Fiscal Governance Database and EU legislation, DG ECFIN
0
5
10
15
20
25
30
1990 2010
Num
ber
of countr
ies
Budget balance rules
EU rules
1990 2000 2010
Expenditure rules
1990 2000 2010
Debt rules
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When were rules adopted?
Source: Fiscal Governance Database and EU legislation, DG ECFIN
0
5
10
15
20
25
30
1990 2000 2010
Num
ber
of countr
ies
Budget balance rules
National rules
EU rules
1990 2000 2010
Expenditure rules
1990 2000 2010
Debt rules
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National fiscal rules overview
Note: only GG and CC rules in place in 2017; FI and NL also have revenue rules
Source: Fiscal Governance Database, DG ECFIN
0 10 20 30 40
GG
CG
RG
LG
SS
Type of rules and coverage (2017)
Expenditure rules Budget balance rules
Debt rules Revenue rules
BE DE
EE FRLU SI
AT
BG ES FI
IE IT LV NL RO SE SK
BBR
ER
DR
CY CZ
EL HU MT PT
DK LT
HR
PL
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Main design features
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Main design features
Budget balance rules (2017)
EU rules: 3% of GDP reference value Structural balance rule, with adjustment to MTO
National rules: 3% GDP reference value: AT, BG, NL, HU SBR (fiscal compact): AT, BE, BG, CY, DE, DK, EE, EL, ES, FI, FR, IE, IT, LT, LU, LV, MT, NL, PT, RO, SI, SK SBR: HU Other rules: BG, CZ, FI (CG), PT (CG), SE, UK
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Main design features
Expenditure rules (2017)
EU rules Expenditure benchmark: expenditure aggregate net of discretionary measures should grow ≤ medium-term pot.GDP Expenditure aggregate: net of interest payments, cycl- unemp benefits, exp fully matched by EU funds, one-offs
National rules Expenditure benchmark: AT, BG, HR, IT, LV, RO, ES Medium-term expenditure ceilings: DK, NL, SE (CG+SS), FI (CG) Other rules: BG, IE, PL, LT (CG), SK (CG), UK (welfare cap)
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Main design features
Debt rules (2017)
EU rules: Debt 60% of GDP Debt reduction benchmark = reduction of 5% per year on average over 3 years of the excess above 60% taking the cycle into account
National rules Debt 60% of GDP: BG, ES, LV, NL, PL, RO Debt reduction benchmark: AT, CY, IE, IT, PT Other rules: CZ, EE (CG), FI, HU, UK, SK
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Possible tensions and consistency
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Multiple fiscal rules: examples
DR DR
DR
ER
ER
ER BBR
BBR
BBR
BBR
BBR
ER
BBR
BBR
BBR
ER
DR
ER
BBR
ER
DR
BBR
Bulgaria
General government Local and/or regional governments
Italy
Challenges from many coexisting rules:
• Targets might be inconsistent;
• More complex monitoring and communication
=> less transparency and credibility.
EU rules
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Coverage
0
20
40
60
80
100
120
AT BG DK ES FI HR IE IT LT LV NL PL RO SE SK UK
Coverage of total expenditure (%) (2017)
National expenditure rules EU expenditure benchmark
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Coverage
0
20
40
60
80
100
120
AT BG DK ES FI HR IE IT LT LV NL PL RO SE SK UK
Coverage of total expenditure (%) (2017)
National expenditure rules EU expenditure benchmark
= Expenditure benchmark national rule in place
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Additional factors of tension
Increased complexity: At the EU level, developments in the SGP and its application, including to promote flexibility At national level, changes to adapt the rules to evolving contexts, divergences in interpretation
Accounting standards: EU rules: ESA National rules….it varies (ESA, Cash/ Budgetary accounting, ESA + cash…)
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Accounting standards for national rules (2017)
Cash/Budgetary accounting
ESA
GG
CG
LG RG SS
AT AT AT BE BG BG BG BG BG
CY CY DE DK EE EL ES ES ES FI FI FI FR FRHU HU IE IE IE IT LT LT LU LV LV LV HR NL NL NL NL PT PTRO RO RO SE SI SK UK UK UK MT MT
FI IE IT IT LT NL
BE BE BE BG BG BG DE DE DE EE FI FR LT LU
PL PT PT RO RO SE SK SK
AT BG BG DE DK FI FR HU NL PL SE
SK UKPL
EE
IT IT PT LU
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Consistency: stakeholders’ survey on national fiscal rules
Source: Stakeholders survey
Promotion of Treaty reference values Promotion of fiscal discipline in line with the SGP
0%
10%
20%
30%
40%
50%
60%
70%
Average orbelow
High Very high
MoFs IFIs
0%
10%
20%
30%
40%
50%
60%
70%
Average orbelow
High Very high
MoFs IFIs
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Open questions
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Open questions
• To what extent do you see synergies and consistency between EU and national rules?
• If there is some tension between the two sets of rules, what do you see as main source(s)?
• How can this tension be addressed?
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Thank you!