The role of independent fiscal institutions in managing the European sovereign debt crisis: The case of the United Kingdom, Germany and Poland
Since 2008, several OECD member countries had experienced a debt crisis, or at least were close to it. Three countries, Greece and Ireland in 2010, and Portugal in 2011, needed to receive help from the IMF through rescue packages. The debt ratio is expected to be above 60% of the GDP based on the projections for most of the OECD countries by 2015, (Rogoff, Reinhart, 2010), which means that the number of countries with the debt to GDP ratio of around 80 to 100 percent will increase. The debt crisis occurs partially as consequences of errors in the economic policy. The government’s fiscal discipline institutions can help to maintain the government deficit and manage the public debt. The reason for the founding of these institutions is mainly to ensure the sustainability of the public debt, to create fiscal discipline, to maintain the budget deficit and to ensure the transparency of the budgetary process. In some EU countries, fiscal councils responsible for preserving fiscal discipline and compliance have existed for years. Ireland, Portugal and Slovakia have also launched initiatives to establish independent fiscal institutions. The goal of the paper is to examine what the influence is of having approached the critical level of public debt, on changes to the fiscal rules in three countries of the European Union (Germany, Poland and the United Kingdom). The present study aims to compare the institutions that are responsible for fiscal budgetary discipline in the countries that are examined, with special regard to the degree of their independence, the duration of their existence, and areas of activity. The research results will be formulated regarding the lessons learned on the role of the EU fiscal policy institutions in crisis management.
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