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Fiscal and Other Rules in EU Economic Governance: Helpful, Largely Irrelevant or Unenforceable?

Published online by Cambridge University Press:  01 February 2017

Iain Begg
Iain Begg*
Affiliation:
European Institute, London School of Economics and Political Science
*
E-mail: Iain.Begg@lse.ac.uk
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Abstract

EU Member States, particularly in the Euro Area, have been pushed to adopt more extensive and intrusive fiscal rules, but what is the evidence that the rules are succeeding? The EU level Stability and Growth Pact (SGP) has been – and remains – the most visible rule-book, but it has been complemented by a profusion of national rules and by new provisions on other sources of macroeconomic imbalance. Much of the analysis of rules has concentrated on their technical merits, but tends to neglect the political economy of compliance. This paper examines the latter, looking at compliance with fiscal rules at EU and Member State levels and at the rules-based mechanisms for curbing other macroeconomic imbalances. It concludes that politically driven implementation and enforcement shortcomings have been given too little attention, putting at risk the integrity and effectiveness of the rules.

Keywords

Fiscal rulesEuropean economic governanceMacroeconomic imbalancesPolitical economy of complianceFiscal councils in EuropeF42H11H61H77H81
Type
Research Articles
Information
National Institute Economic Review , Volume 239 , February 2017 , pp. R3 - R13
Copyright
Copyright © 2017 National Institute of Economic and Social Research

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Footnotes

This paper is produced as part of the FIRSTRUN project (grant 649261), for which funding from the EU Horizon 2020 programme is gratefully acknowledged.

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