Strengthening budgetary surveillance and coordination of budgetary policy measures in the EU is of vital importance for economic stability and growth. The decentralised decision making structure in most areas of budgetary policies, requires the need to balance national and common objectives;...

The purpose of this note is to compare the characteristics of the actual Stability and Growth Pact with that of a European "modified golden rule." The latter would consist in achieving in each EU country a cyclically-adjusted net-of-public-investment balance. The benchmark for comparison is the...

The euro area is facing crisis, while the US is not, though the overall fiscal situation and outlook is better in the euro area than in the US, and though the US faces serious state-level fiscal crises. A higher level of fiscal federalism would strengthen the euro area, but is not inevitable....

The euro area is facing crisis, while the US is not, though the overall fiscal situation and outlook is better in the euro area than in the US, and though the US faces serious state-level fiscal crises. A higher level of fiscal federalism would strengthen the euro area, but is not inevitable....

In 2020, in the context of the COVID-19 health crisis, the rules of the Stability and Growth Pact were temporarily suspended in the European Union. Nevertheless, the European Council and the European Parliament reached an agreement for the reactivation of these rules in 2024. A simple analytical...

This paper deals with the origin and the evolution of the European system of fiscal rules and discusses the perspectives for future developments. The early debate about the design of establishing a monetary union in a not optimal currency area, with decentralized fiscal policies, is...

The paper contributes to the discussions on fiscal governance in Europe. It takes stock of recent reforms, identifies areas for further progress, and discusses a menu of policy options for the medium-term. The issues covered include: (i) the growing complexity of the European framework and ways...

This paper reviews the evolution of the Economic and Monetary Union from its inception in 1992 with the Treaty of Maastricht to the most recent reforms adopted in 2013 to respond to the eurocrisis. The paper describes the evolution of the four pillar of economic governance: the surveillance and...

With a unique data set summarizing the quality of rules-based fiscal governance in EU member states, we show that stronger fiscal rules in euro area members reduce sovereign risk premia, in particular in times of market stress. To do so, we develop a model of sovereign spreads that are...

With the announcement to intervene on the financial markets in case of need to keep the Eurozone intact, the ECB has attenuated the pressure of the markets on the endangered peripheral countries of the Eurozone. Critics argue that by eliminating the market's disciplining interest mechanism,...