SOGEI website background

Adjusting ambitions: The EU’s short ‘romance’ with the debt reduction rule

Adjusting ambitions: The EU’s short ‘romance’ with the debt reduction rule

The notion that fiscal rules are necessary to safeguard fiscal responsibility is a widely accepted tenet of fiscal policy. However, experience with the implementation of EU fiscal rules has been mixed, driving a wedge between initial ambitions and outcomes. This column uses the latest update of the compliance tracker of the European Fiscal Board secretariat to shed some light on the debate. In particular, it points out that if consistently followed over time, all numerical rules are equally demanding.