Debt Sustainability in the Emerging New EU Fiscal Framework: A Major Change
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Cinzia Alcidi
Abstract
If agreed, the new European Commission legislative proposals on the reform of the fiscal framework will represent a major change. First and foremost debt replaces budget deficit as central variable, and debt sustainability assessment becomes a pivotal concept. It allows to introduce a multiannual approach and more flexible framework disconnected from numerical rules, which, in principle, gives member states greater ownership but also greater responsibility for their choices. It can only work if member states recognise that debt sustainability assessment is a risk-management tool that has to be taken seriously.
References
Alcidi, C., and D. Gros. 2018. “Debt Sustainability Assessments: The State of the Art.” in-depth analysis requested by the European Parliament’s ECON Committee. http://www.europarl.europa.eu/RegData/etudes/IDAN/2018/624426/IPOL_IDA(2018)624426_EN.pdf.Search in Google Scholar
European Commission. 2023a. “Proposal for a Regulation of the European Parliament and of the Council on the Effective Coordination of Economic Policies and Multilateral Budgetary Surveillance and Repealing Council Regulation (EC) No 1466/97.” https://economy-finance.ec.europa.eu/system/files/2023-04/COM_2023_240_1_EN.pdf.Search in Google Scholar
European Commission. 2023b. “Debt Sustainability Monitor 2022.” Institutional paper 199|APRIL 2023. https://economy-finance.ec.europa.eu/system/files/2023-04/ip199_en_1.pdf.Search in Google Scholar
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Articles in the same Issue
- Frontmatter
- Editorial
- The Economists’ Voice, June Issue 2023, Editorial
- Policy Papers
- Davids and Goliaths: Hidden Champions in an Age of Industrial Policy
- Can You Have Your Corporate Wokeism and Eat it too?
- Lessons from Latin America Dollarization in the Twenty First Century
- Measuring Communication Quality of Interest Rate Announcements
- The Political Economy of Transatlantic Security – A Policy Perspective
- Policy Forum: Monetary Policy and the Threat of Fiscal Dominance
- Apolitical Money – An Illusion?
- The ECB’s Transmission Protection Instrument and Fiscal Stability
- Debt Sustainability in the Emerging New EU Fiscal Framework: A Major Change
- Government Bond Spreads in the Euro Area
- Selective Bond Purchases – May the ECB Chose Winners and Losers?
- Britain’s Failed Attempt at Monetary and Fiscal Exceptionalism
- Government Debt and Monetary Policy Perspectives in Japan
- Long-Term Strategies to Reduce Public Debt from a Historical Perspective
