How Credible are Multiannual Budgetary Plans in the EU?

24 Pages Posted: 15 Feb 2012

See all articles by Laurent Moulin

Laurent Moulin

European Union - Directorate General for Economic and Financial Affairs (DG ECFIN)

Peter Wierts

De Nederlandsche Bank; VU University Amsterdam

Date Written: March 30, 2006

Abstract

We investigate the track record of multi-annual budgetary plans of EU Member States formulated in the Stability and Convergence Programmes and updates. The study is based on the analysis of an original database summarizing the main macroeconomic and budgetary variables projected by the Member States in their Programmes under the original SGP. Results show that the failure to achieve the projected reductions in the general government deficit reflects primarily difficulties to adhere to expenditure plans in nominal terms. This does not seem to be due to particularly unfavorable macroeconomic developments, but rather to the difficulties of EU countries to implement the reforms which would have been necessary to respect the ambitious expenditure targets. On the revenue side, negative growth surprises have been relevant, but the effect is less important. Overall, conclusions point to a need for strengthening expenditure control mechanisms in most of the EU Member States.

Suggested Citation

Moulin, Laurent and Wierts, Peter, How Credible are Multiannual Budgetary Plans in the EU? (March 30, 2006). Available at SSRN: https://ssrn.com/abstract=2005228 or http://dx.doi.org/10.2139/ssrn.2005228

Laurent Moulin

European Union - Directorate General for Economic and Financial Affairs (DG ECFIN) ( email )

BU-1 05/190
Brussels, Bruxelles B-1049
Belgium

Peter Wierts (Contact Author)

De Nederlandsche Bank ( email )

P.O. Box 98
1000 AB Amsterdam
Netherlands

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

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