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Stability and Growth Pact and Fiscal Discipline in the Eurozone

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  • Ngai, Victor

    (University of PA)

Abstract

The Economic and Monetary Union in the European Union relies on fiscal coordination among member states to prevent excessive levels of deficit and debt and to ensure the stability of its single currency. This paper examines the framework of fiscal rules put in place before and after the launch of the euro. I find that enforcement of the budgetary limits in the Stability and Growth Pact was insufficient at the institutional level by the European Commission and by the Economic and Financial Affairs Council (ECOFIN), as well as at the level of the financial markets. In order for fiscal rules across the Eurozone to be successful, proposals for reforming the Pact, including the Six-Pack and the Fiscal Compact Treaty, will need to address enforcement problems on both political and market levels.

Suggested Citation

  • Ngai, Victor, 2012. "Stability and Growth Pact and Fiscal Discipline in the Eurozone," Working Papers 12-10, University of Pennsylvania, Wharton School, Weiss Center.
    • Handle: RePEc:ecl:upafin:12-10
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    File URL: http://fic.wharton.upenn.edu/fic/papers/12/12-10.pdf
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    References listed on IDEAS

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    2. IALOMITIANU Razvan Gheorghe & BOLDEANU Teodor Florin, 2017. "Romania And The Euro. An Overview Of Maastricht Convergence Criteria Fulfillment," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 69(1), pages 74-87, April.

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    More about this item

    JEL classification:

    • 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
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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