In April 2023, the European Commission issued a directive proposal on EU economic governance reform. The Council cut some tasks of Independent Fiscal Institutions (IFIs) that were in the Commission directive proposal; whether this cutting is justified is an open question. Early this year, the...

Debt-to-GDP ratios have grown to unprecedented levels in many industrialised economies. To combat this threat, the authors call for a global debt brake following the Swiss or German example. The debt brakes should be incorporated into national constitutions and monitored by independent...

The Swiss debt brake served as a model for the new German budget rule. The two tools share the long-term goal of rendering fiscal policy sustainable by stabilising nominal debt as well as the short-term goal of smoothing the economic cycle. Debt brakes thus act as an automatic stabiliser within...

Italy is presently one of the most vulnerable economies in the eurozone. Over the past twenty years it has failed to adapt to increasing global competition and its public finances have deteriorated dramatically. Even with huge fiscal support from the other members of the eurozone, Italy’s...

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...