Enforcement and the Stability and Growth Pact: How Fiscal Policy Did and Did Not Change Under Europe's Fiscal Framework

34 Pages Posted: 21 Jun 2006

See all articles by Anthony Annett

Anthony Annett

International Monetary Fund (IMF)

Date Written: May 2006

Abstract

The Stability and Growth Pact has been a success in numerous EU countries, especially in guiding them toward underlying fiscal balance ahead of population aging. These countries tend to be smaller, subject to greater macroeconomic volatility, and reliant on a form of fiscal governance that emphasizes targets and contracts. Most of the new members share these characteristics. For the countries less compatible with the Pact, domestic governance reforms that increase the reputational costs for noncompliance can be useful complements to the fiscal framework.

Keywords: Fiscal policy, enforcement, political economy

JEL Classification: E61, H62

Suggested Citation

Annett, Anthony, Enforcement and the Stability and Growth Pact: How Fiscal Policy Did and Did Not Change Under Europe's Fiscal Framework (May 2006). IMF Working Paper No. 06/116, Available at SSRN: https://ssrn.com/abstract=910681

Anthony Annett (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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