Medium-term fiscal-structural plans under the revised Stability and Growth Pact

Othman Bouabdallah, Cristina Checherita-Westphal, Roberta De Stefani, Stephan Haroutunian, Sebastian Hauptmeier, Christian Huber, Daphne Momferatou, Philip Muggenthaler-Gerathewohl, Ralph Setzer and Nico Zorell

Economic Bulletin Articles, 2025, vol. 3

Abstract: This article analyses the medium-term fiscal-structural plans that euro area countries have submitted under the revised Stability and Growth Pact. It discusses the fiscal and economic implications of this framework over the short and medium term, also factoring in – on a preliminary basis and acknowledging the major uncertainty ahead – the recent proposal by the European Commission to activate the national escape clause in the Stability and Growth Pact in a coordinated manner. The EU’s new economic governance framework builds on the premise that fiscal sustainability, reforms and investment are mutually reinforcing and should be fostered as part of an integrated approach. The article emphasises the importance of launching the new framework effectively and ensuring appropriate monitoring of reform and investment commitments in the plans. This is also necessary to ensure that additional spending on defence does not endanger fiscal sustainability in the medium term. JEL Classification: H11, H50, H54, H60, H68

Keywords: Economic governance framework; national medium-term fiscal-structural plans (search for similar items in EconPapers)
Date: 2025-04
Note: 2679249
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