EconPapers    
Economics at your fingertips  
 

Reforming the Stability and Growth Pact: Breaking the Ice

Catherine Mathieu () and Henri Sterdyniak ()

No 2003-02, Sciences Po publications from Sciences Po

Abstract: This paper presents a critical assessment of the Stability and Growth Pact (SGP). Section 2 recalls the fiscal policy framework in the euro area. Section 3 provides an assessment of the first five years of the SGP. Section 4 addresses the weaknesses of the procedures: arbitrary criteria, insufficient economic policy co-ordination. Section 5 discusses European Commission’s recent proposals: strengthening its influence on national fiscal policies; considering ‘close-to-balance or in surplus’ underlying budgetary positions. Section 6 discusses recent academic proposals: budgetary federalism, golden rule, permanent balance rule, public expenditure rule, fiscal policy committees, public debt surveillance... In section 7 we suggest that national budgetary policies should be responsible for managing the inflationproduction trade-off, under a medium term inflation objective, while monetary policy would target interest rates. This policy mix would give better outcomes in terms of economic stabilisation than the existing framework.

Date: 2003-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
https://spire.sciencespo.fr/hdl:/2441/1933/resources/wp2003-02.pdf (application/pdf)

Related works:
Working Paper: Reforming the Stability and Growth Pact: Breaking the Ice (2003) Downloads
Working Paper: Reforming the Stability and Growth Pact: Breaking the Ice (2003) Downloads
Working Paper: Reforming the Stability and Growth Pact: Breaking the Ice? Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spo:wpmain:info:hdl:2441/1933

Access Statistics for this paper

More papers in Sciences Po publications from Sciences Po Contact information at EDIRC.
Bibliographic data for series maintained by Spire @ Sciences Po Library ().

 
Page updated 2019-08-17
Handle: RePEc:spo:wpmain:info:hdl:2441/1933