Public finances in EMU

ZEDDA, STEFANO;Campolongo F;Cariboni J;Marchesi M;Petracco M;Salto M.

2011-01-01

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Abstract

The optimism of the Spring that the European economy is emerging into the post-crisis world has become more cautious. The report provides an overview of the current developments, looking at recent outcomes and both the Commission services' and the Member States' own projections for the public finances. This provides the background to discuss the proposed reform to economic and budgetary surveillance which is currently nearing the end of the adoption process and which seeks to put into action the main lessons learnt from the crisis. The report discusses the various parts of the reform in details, looking at the changes to the Stability and Growth Pact (SGP), as well as the other proposals which accompany it and are key to an integrated policy change. It shows how the reform package addresses the weaknesses identified by the crisis, both in terms of the setting of policy and the correction of deviations from the optimal path.