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Compliance with fiscal rules in EU countries
[Dodržování fiskálních pravidel v zemích EU]

Author

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  • Pavel Morda

Abstract

The global financial crisis and the ensuing European debt crisis have exposed weaknesses in the structural fiscal stance of many European countries, where public debt has risen sharply over the past decade. At the same time, fiscal rules were reconsidered and adjusted, which did not consider the stabilizing function of fiscal policy important and allowed the governments of European countries to set pro-cyclical fiscal policies. Along with the implementation of new fiscal rules, politically independent national fiscal councils have also been established in the EU. An empirical analysis of compliance with fiscal rules in EU countries in 2002-2019 shows that only 55% of fiscal rules were complied with. At the same time, it seems that significant differences can be found between countries in terms of their tendency to comply with fiscal rules. The long-term negative consequences for fiscal policy were caused by the COVID-19 pandemic, which resulted in an average increase in debt relative to GDP of more than 10 percentage points.

Suggested Citation

  • Pavel Morda, 2021. "Compliance with fiscal rules in EU countries [Dodržování fiskálních pravidel v zemích EU]," Český finanční a účetní časopis, Prague University of Economics and Business, vol. 2021(1), pages 5-21.
    • Handle: RePEc:prg:jnlcfu:v:2021:y:2021:i:1:id:552:p:5-21
    DOI: 10.18267/j.cfuc.552
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    References listed on IDEAS

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    More about this item

    Keywords

    Fiscal rules; Fiscal councils; Fiscal policy; Fiskální pravidla; fiskální rady; fiskální politika;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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