European Fiscal Rules

The sound of economics is a series of podcasts about economic policy, brought to you by Bruegel.

Each episode will look at a key economic policy debate, discuss why it is important and explore some of the work that Bruegel's researchers have done in the area.

This episode is about European fiscal rules.

EPISODE 1

The strong fiscal tightening implemented in many European countries since 2010 has contributed to the poor economic recovery in Europe. This raises doubts about the effectiveness of the EU’s fiscal rules in achieving their two main objectives: public debt sustainability and fiscal stabilisation.

A key indicator in the framework is the structural budget balance, but it is very difficult to measure. Recommendations made based on the structural budget balance are often revised when initial estimates turn out to be wrong.

Another problem with the current EU fiscal framework is the opaque web of ‘flexibility’ clauses. This leads to never-ending bargaining between member states and the European Commission about the implementation of the rules, which undermines trust in them.

A recent Bruegel policy contribution by Gregory Claeys, Zsolt Darvas and Alvaro Leandro analyses and assesses the framework and proposes a new set of rules.

Producers – Giuseppe Porcaro & Vanessa Cotterell

CONTENT

The current European fiscal framework and its flaws — until min. 07:50

Bruegel scholars propose new fiscal rules — from min. 07:50

Is a European fiscal council a good idea? — from min. 11:30

SPEAKERS

Gregory Claeys — Research Fellow, Bruegel

Zsolt Darvas — Senior Fellow, Bruegel

Jochen Andritzky — Secretary General of the German Council of Economic Experts

Filippo Taddei — Chief Economist of the Democratic Party, Italy

Presenters — Áine Quinn, Bryn Watkins, Bruegel

Read more:

A proposal to revive the European Fiscal Framework by Gregory Claeys, Zsolt Darvas, Alvaro Leandro bruegel.org/2016/03/a-proposal-…n-fiscal-framework/

How to reform EU fiscal rules by Grégory Claeys & Zsolt Darvas http://bruegel.org/2016/04/how-to-reform-eu-fiscal-rules/

Filling the gap: open economy considerations for more reliable potential output estimates by Zsolt Darvas & Andras Simon bruegel.org/2015/10/filling-the…l-output-estimates/