Brussels, 01/04/2016 (Agence Europe) - On Friday 1 April, the European Commission reiterated that the methodology laid down in the stability and growth pact to calculate the output gap is the subject of an agreement between the member states.
“The indicators that we use in the context of the stability and growth pact, which includes this methodology for estimating potential output, are agreed by all member states”, said the European institution's spokesperson for economic affairs. She added that a specific working group of the Council of the EU regularly discussed the issue.
Eight member states (Spain, Italy, Latvia, Lithuania, Luxembourg, Portugal, Slovenia and Slovakia) called in a letter to the Commission last week for a revision of the method used to calculate the output gap - that is, the difference between the potential growth of a state and the actual growth achieved. Amongst other things, they argue that the timeframe used as a calculation basis should be four years rather than the period of two years currently used.
Under the pact, procedures related to the budgetary deficit are based on national performances in terms of nominal deficit. However, the question raised by the eight countries is important as the calculation of the output gap has an impact on structural efforts (not including economic conditions) that the states have to achieve to put their public finances on a healthier footing and stimulate their competitiveness. (Original version in French by Mathieu Bion)