Insights on the Evolution of Fiscal Discipline in the European Union
Insights on the Evolution of Fiscal Discipline in the European Union

Summary/Abstract: Fiscal discipline is a highly discussed subject in EU politics, media and the general public. But, as a part of a bigger picture – the fiscal integration process, fiscal discipline doesn’t appear from sudden; instead it evolves over time through carefully thought steps and decisions. In this paper we discuss the evolution of fiscal discipline components over time and how they correlate inside the EU framework, sample period being 1994-2015. As our analysis proves, EU governments are more than ever committed in maintaining sound public finances and fiscal discipline through the implementation of fiscal rules at a national level, and also by accompanying the rules with independent enforcing and monitoring institutions. In order to make the commitment more credible, EU states have also introduced sanctions for noncompliance and automatic correction and sanction mechanisms.

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