On Wednesday 11 September, the European Fiscal Board published a report on the assessment of the European Union's fiscal rules, particularly the ‘six-pack’ and ‘two-pack’ regulations, in which the advisory body presented mixed conclusions on the application and results of these standards.
This report’s publication comes two days before the Eurogroup meeting in Helsinki, where euro area finance ministers are expected to discuss the relevance and future of these fiscal rules (see EUROPE 12324/6) with a view to their possible revision.
The European Fiscal Board notes first of all that the sovereign debt crisis highlighted weaknesses in the architecture of Economic and Monetary Union (EMU). The ‘six-pack’ and ‘two-pack’ regulations were adopted specifically to remedy this situation. It then notes that these last two pieces of legislation have made it possible to strengthen fiscal rules, while leaving more flexibility and discretion in their application.
When it comes to reviewing these rules, the Fiscal Board is not being Manichean. Indeed, this advisory body’s experts note that progress has been made on fiscal imbalances and the consolidation of public finances. As a result, since June, no Member State has been subject to an excessive deficit procedure (see EUROPE 12275/5). They also note that the euro area's fiscal stance has remained broadly neutral since 1999 (see EUROPE 12292/10).
However, the European Fiscal Board notes that compliance with the rules varies widely, both in terms of periods and countries. In particular, each country’s debt stance differs significantly. In addition, the fiscal targets with which Member States must comply are sometimes postponed. The body further notes that sanctions are not necessarily imposed, for political and other reasons.
Finally, the Fiscal Board expressed its views on the governance of the EMU. According to the report, the Directorate-General for Economic and Financial Affairs of the European Commission should play a more independent role and the President of the Eurogroup should exercise this function on a full-time basis, without being the Minister of Finance of a State or a member of the Commission. See the full report: https://bit.ly/2m9riZv (Original version in French by Lucas Tripoteau)