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The Good, the Bad and the Ugly

Author

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  • Ludovit Odor

    (Council for Budget Responsibility)

Abstract

Under substantial market pressure, policymakers have proposed a diverse set of far-reaching changes to the basic European fiscal architecture. The adoption of the so called “Six-pack”, “Two-pack” and the agreement on the Fiscal Compact made the fiscal framework more complex, but the proponents highlighted their main benefits in higher transparency at national level, more local ownership and stricter enforcement mechanisms. This paper´s objective is to critically assess the new framework, its initial implementation and to identify potential shortcomings. The well-known Kopits-Symansky criteria represent the basis for the review. We also formulate fifteen recommendations, which aim at a simpler, more internally consistent system where flexible interpretation is not necessary to eliminate tensions between various elements of the framework.

Suggested Citation

  • Ludovit Odor, 2014. "The Good, the Bad and the Ugly," Discussion Papers Discussion Paper No. 3/20, Council for Budget Responsibility.
    • Handle: RePEc:cbe:dpaper:201403
    as

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    References listed on IDEAS

    as
    1. Mr. Olivier J Blanchard & Mr. Giovanni Dell'Ariccia & Mr. Paolo Mauro, 2013. "Rethinking Macro Policy II: Getting Granular," IMF Staff Discussion Notes 2013/003, International Monetary Fund.
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    More about this item

    Keywords

    fiscal rules; Kopits-Symansky criteria; structural budget balances;
    All these keywords.

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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