The sovereign debt crisis in the euro area is a symptom of policy failures and deficiencies in – among other things – fiscal policy coordination. The first nine years of the euro were not used effectively in order to improve public finances, while the Stability and Growth Pact was watered...

Credible fiscal plans that aim at restoring fiscal sustainability will be essential to counter the present increase in debt levels all across Europe. The macroeconomic scenario of such plans will be crucial. This paper assesses whether there is any advantage in delegating (part of) such power to...

The sovereign debt crisis in the euro area is a symptom of policy failures and deficiencies in – among other things – fiscal policy coordination. The first nine years of the euro were not used effectively in order to improve public finances, while the Stability and Growth Pact was watered...

Due to radical fiscal adjustments and the overdue monetary easing, the lag of the European economy behind the United States has grown by more than 7 per cent in the past five years, although the source of the crisis was not the EU but the US. The efficient method of crisis management would be if...

We use a policy rule framework and focus on the response of the primary surplus to accumulated public debt to test a sufficient condition for sustainability. The evidence we report suggests that sustainability was prevalent in many EU countries before Maastricht, but also that the Maastricht...

The sovereign debt crisis in the euro area is a symptom of policy failures and deficiencies in – among other things – fiscal policy coordination. The first nine years of the euro were not used effectively in order to improve public finances, while the Stability and Growth Pact was watered...

The Stability and Growth Pact and recently, The European Fiscal Compact are based on the assumption that national tax policy Member States could have a negative impact on partner countries. Eurozone countries have pledged to respect the Stability and Growth Pact, its observance is an example of...

We will study in this paper the relation between public investment, public debt and fiscal rules in the European Union countries. The strict fiscal rules imposed by EU have negatively affected the investments. The decline in public investment in European Union is related to the fiscal rules...

The origins of the reference values for budget deficits and public debt (3 and 60 per cent of GDP) in the euro area are explored. Both numbers came into the Maastricht Treaty by coincidence. Later attempts to legitimise them are traced and found unconvincing. In particular the debt cap is...

While the European Union (EU) fiscal rules are suspended in the years 2020–2022, new rules are in the making and might be activated in 2023. If the old rules were used again, massive austerity would be required in the face of the strongly elevated level of public debt and the gap to the 60 per...