European budgets (and a multinational fiscal board joining the family)

 •  Filed under fiscal policy and taxation, EU

European Fiscal Board

October

Decision to establish an independent advisory European Fiscal Board: link

EFB in the news - Politico.eu

new measures involve starting a new group of five macroeconomic experts in 2016, called the European Fiscal Board, who will provide advice to the Commission on its oversight of national budgets and debt levels. Since the global financial crisis, national debt across the eurozone has increased 20 percent, relative to economic output.

But experts worry that convening new meetings and increasing the flow of progress reports in Brussels will do little to address the causes of the problem. “The national competitiveness boards and the euro-area Fiscal Council are all ‘soft’ measures whose actual impact is highly uncertain,” said Daniel Gros, president of the Center for European Policy Studies.

Early November

ECB Economic Bulletin: The creation of a European Fiscal Board

Reuters: Eurogroup chief says euro zone needs more independent fiscal board

Dijsselbloem said the board should be completely outside the Commission, as suggested in a report by the 28-nation bloc's top five officials in June -- the so-called five presidents' report. "The Commission has now put forward a proposal but it is less ambitious, it is an advisory group inside the Commission with a smaller mandate," Dijsselbloem told reporters at a news conference in Bratislava. "So I am going back to the original proposal which was an independent fiscal board like we have on the national level."

Spending updates

FT: Brussels sounds alarm on Spain and France budget deficits

According to the latest commission economic forecast, France will be the only country in the eurozone with a deficit above 3 per cent of gross domestic product two years from now. Italy, in contrast, emerged as a bright spot in the commission’s forecast: Brussels upgraded its economic forecasts for Italy to 0.9 per cent growth this year and 1.5 per cent growth next year, the latest sign of growing confidence in the strength of the recovery in the eurozone’s third-largest economy.

... Brussels said it expected Spain’s deficit to stand at 4.7 per cent of GDP this year and 3.6 per cent in 2016.

Nasdaq: Germany Will Balance Budget in 2016

Germany will have 5.2 billion euros ($5.77 billion) less tax revenue available next year but the government said it can still reach its target for a balanced budget despite higher costs the country faces from the migrant crisis.

Fiscal assessment

Tony Barber: The eurozone’s fiscally lax nations are at it again

If the eurozone crisis had a multitude of causes, of which fiscal irresponsibility was not the most important (except in Greece), it will seem less worrying that some governments are reverting to old habits. However, even if a new round of rule-bending will not kill the eurozone, it should not be dismissed as irrelevant.

Governments that observe common rules will never trust those that evade them. The real danger, then, is that an enduring mistrust over rule-bending will prevent the eurozone from achieving the closer banking, fiscal and economic union required to survive another serious crisis.

Reference

A fairly long list of existing national fiscal councils: link