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EU fiscal rules: An assessment of trends and prospects against the backdrop of the ongoing economic governance review

The EU fiscal framework, and in particular the EU’s fiscal rules, have been under review since early 2020, and the European Commission presented detailed orientations for a possible reform in November 2022. If implemented, these orientations would imply a major change compared to the pre-pandemic framework.An important objective of the orientations is to enhance national ownership through tailor-made fiscal adjustment paths for countries with high or moderate sustainability risks and incentives for structural reforms and government investment. Although EU Member States broadly share the main direction underlying the Commission’s proposal, they remain divided on key principles and details. In his presentation, Martin Larch from the European Fiscal Board will outline the Commission’s reform proposal, offer an assessment of its pros and cons, and discuss the way forward. Philipp Heimberger from wiiw will then offer comments before the floor is opened for discussion.