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Fiscal adjustment between 1991 and 2002 - stylised facts and policy implications

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  • Maria Gabriella Briotti

Abstract

This paper aims to assess whether the implementation of the European Union (EU) framework of fiscal rules has been successful in promoting budgetary consolidation in EU Member States. The paper focuses on the period 1991-2002. Stylised facts show that Member States implemented major budgetary adjustments in the 1990s marking clear structural breaks in the policy regimes compared with the previous decade. However, most progress was made via revenue-based adjustment, including temporary measures, with insufficient emphasis put on primary expenditure restraint. In recent years, “consolidation fatigue” has been evident in many Member States. Although an unfavourable economic environment has adversely affected nominal budget balances in recent years, budget indicators suggest that the process of budgetary adjustment, which started in the 1990s, is far from complete in many countries.

Suggested Citation

  • Maria Gabriella Briotti, 2004. "Fiscal adjustment between 1991 and 2002 - stylised facts and policy implications," Occasional Paper Series 09, European Central Bank.
  • Handle: RePEc:ecb:ecbops:20040009
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    Cited by:

    1. Thimann, Christian & Drage, John & Nikitin, Minna & Just, Christian & Pauli, Rolf & Committeri, Marco & Weber, Pierre-François & Fernández de Lis, Santiago & von Stenglin, Stephan & Hollensen, Ole & B, 2005. "Managing financial crises in emerging market economies - experience with the involvement of private sector creditors," Occasional Paper Series 32, European Central Bank.
    2. David Lodge & Marta Rodriguez-Vives, 2013. "How long can austerity persist? The factors that sustain fiscal consolidations," European Journal of Government and Economics, Europa Grande, vol. 2(1), pages 5-24, June.
    3. Willman, Alpo & Whelan, Karl & Altissimo, Filippo & Georgiou, Evaggelia & Sastre, Teresa & Valderrama, Maria Teresa & Sterne, Gabriel & Stocker, Marc & Weth, Mark, 2005. "Wealth and asset price effects on economic activity," Occasional Paper Series 29, European Central Bank.
    4. Rina Bhattacharya & Sanchita Mukherjee, 2013. "Non-Keynesian effects of fiscal policy in OECD economies: an empirical study," Applied Economics, Taylor & Francis Journals, vol. 45(29), pages 4122-4136, October.
    5. Sturm, Michael & Siegfried, Nikolaus, 2005. "Regional monetary integration in the member states of the Gulf Cooperation Council," Occasional Paper Series 31, European Central Bank.
    6. repec:kap:pubcho:v:171:y:2017:i:3:d:10.1007_s11127-017-0441-0 is not listed on IDEAS
    7. Enderlein, Henrik & Lindner, Johannes & Calvo-Gonzalez, Oscar & Ritter, Raymond, 2005. "The EU budget - how much scope for institutional reform?," Occasional Paper Series 27, European Central Bank.
    8. Dierick, Frank & Pires, Fatima & Scheicher, Martin & Spitzer, Kai Gereon, 2005. "The New Basel Capital Framework and its implementation in the European Union," Occasional Paper Series 42, European Central Bank.

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