There are many reasons to reform the Stability and Growth Pact, but that reform is no panacea. This is because the euro area periphery has increasingly entered a debt conundrum.

The decline of "natural real interest rates" during the last three decades is a common phenomenon in all advanced economies and can be explained by a number of structural factors: the downward trend in potential growth; population ageing, which has led to higher savings rates in many countries;...

Because they exert cross-border spillover effects, fiscal policies of individual EU member states are a common concern for the entire EU.

Faced with the impossibility of reaching a political agreement to review the fiscal treaties, the Commission could limit itself to applying the current rules with flexibility, which would maintain an ambiguous situation: much ado about nothing.

EU fiscal rules are meant to keep public finances on a sustainable path. This paper presents a new database that tracks numerical compliance with the four main rules of the Stability and Growth Pact starting in 1998. Our assessment of numerical compliance abstracts from the many exceptions and...