Interpreting the Close to Balance Provision of the Stability and Growth Pact: Legal and Conceptual Aspects
This paper sets out to interpret the close to balance provision of the Stability and Growth Pact and what it requires of member states in setting their budgetary targets. Among the conclusions reached are that a budgetary position of close to balance or in surplus can be objectively calculated by deducting a safety margin from the Treaty deficit limit of 3 per cent of GDP. It is argued that the safety margin should at least take account of those factors whose impact on the budget balance in the medium term can not be forecast with certainty. In this respect, both cyclical and random factors must be included in the safety margin. This safety margin can be thought of as a minimum safety margin - it indicates the safety margin required to avoid an excessive deficit in the medium term. It is also argued that an additional, supplementary margin for long-term factors should be considered.
|Date of creation:||Dec 2000|
|Contact details of provider:|| Postal: P.O. Box No. 559, Dame Street, Dublin 2|
Phone: (01) 671 6666
Fax: (01) 671 6561
Web page: http://www.centralbank.ie
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:cbi:wpaper:3/rt/00. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Fiona Farrelly)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.