Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/182460
Authors: 
Christofzik, Désirée
Feld, Lars P.
Reuter, Wolf Heinrich
Yeter, Mustafa
Year of Publication: 
2018
Series/Report no.: 
Arbeitspapier 04/2018
Abstract: 
The current European fiscal framework is highly complex. The multitude of fiscal rules and the discretion in their enforcement precludes an effective oversight and weakens the effectiveness of fiscal rules substantially. Against this background, we present a proposal for a careful refocusing of the framework to promote fiscal sustainability. The proposal is centered around an expenditure rule as an annual operational target supplemented by a debt-correction factor and a multi-purpose adjustment account which implements a medium-term structural balance rule. Together with a significant reduction in exemptions and escape clauses as well as less discretion in the imposition of sanctions, the proposal increases transparency and efficacy of fiscal rules at the European level.
Subjects: 
Expenditure rule
Fiscal rules
Public finance
European fiscal framework
JEL: 
H50
H60
E62
Document Type: 
Working Paper

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