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Reforming the EU fiscal rules : what are the policy options?
Mrak, Mojmir
In responding to the COVID crisis emergency and in order to keep their economies afloat, European countries have temporarily suspended the application of EU fiscal rules that govern public finance ...deficits and public debt to GDP ratios. This suspension will remain in place in 2022 but is planned to end with the beginning of 2023. As the current EU fiscal rule rules were put in place for an economic environment that was very different from today, one of the main questions for the EU at this moment is how its fiscal rules should be reformed before they are reinstated. The main objective of this article is to contribute to the discussion on this question. The texts consists of three main substantive chapters. It starts with presentation of the EU fiscal rules as articulated in the Maastricht Treaty and their evolution until the outbreak of the COVID crisis in early 2020. The text continues with making a case for a comprehensive reform of the EU fiscal rules. This case was strong already before the pandemic but became overwhelming during the last two years. In final part of the article provides a brief overview of various proposals for the EU fiscal rules reform including those proposals that would combine fiscal consolidation with large green public investments required to address more and more pressing climate challenges.
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