Close-To-Balance Or in Surplus': A Policy-Maker's Guide to the Implementation of the Stability and Growth Pact
Journal of Common Market Studies, 2000, 38, 4, 563-592
ARTIS, Michael J., BUTI, Marco, Close-To-Balance Or in Surplus': A Policy-Maker's Guide to the Implementation of the Stability and Growth Pact, Journal of Common Market Studies, 2000, 38, 4, 563-592 - https://hdl.handle.net/1814/16744
Retrieved from Cadmus, EUI Research Repository
Under the Stability and Growth Pact, countries are committed to achieve medium-term budget positions of 'close-to-balance or in surplus'. The rationale for this commitment is that such budgetary positions would allow for the full working of the built-in stabilizers without triggering the sanctions procedures of the Pact. This article sets out to show how quantifications of the medium-term (structural) requirement can accommodate the desired aim and suggests how fiscal measurement and forecasting errors as well as the budgetary effects of ageing may be allowed for. All in all, broadly balanced budgets in the medium term appear to be 'roughly right' for most euro-zone countries. Of course, as the cyclical behaviour of the euro-zone economy adapts to the new EMU environment, the medium-term targets will need to be addressed again.
Cadmus permanent link: https://hdl.handle.net/1814/16744
Full-text via DOI: 10.1111/1468-5965.00254
Earlier different version: http://hdl.handle.net/1814/1668
Version: The article is a published version of EUI RSC WP; 2000/28
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