What Remains of the Stability Pact and What Next?(2005:8)


In 2005 the stability pact of the EU was reformed. The revision followed upon violations of the EU fiscal rules by several countries and the breakdown of the pact’s enforcement mechanism. A key question is what contribution the revised stability pact can make towards upholding fiscal discipline in the future.

Professor Lars Calmfors summarises in this report the main EU fiscal rules, reviews the way the rules have been applied in the past, and surveys the recent debate. The report also provides a thorough review and evaluation of the reform of the stability pact. The study takes a pessimistic view on the future of the stability pact and therefore suggests alternative ways of promoting fiscal discipline in the EU: enhanced co-operation in a smaller group of EU countries and stronger national fiscal policy institutions.

The report was presented at the seminar What is left of the Stability Pact? and is a part of the research project Fiscal Policy in the EU and the EMU.

 icon 2005:8 What Remains of the Stability Pact and What Next? (612.18 kB)