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Taking Stock of the EU Fiscal Rules over the Past 20 Years and Options for Reform

  • Christophe Kamps and Nadine Leiner-Killinger EMAIL logo


This paper reviews how the European Union’s fiscal rules have developed from the Maastricht Treaty that established the single monetary policy up until today. It shows that the design of these rules did not always follow economic logic but often resulted from political constraints, giving rise to some flaws in the framework from its very beginning. At the same time, the repeated attempts to adjust the fiscal framework to a multitude of circumstances over the past 25 years have made it overly complex and incoherent. Based on a finding that euro area countries’ compliance with the EU fiscal rules has been unsatisfactory, the paper concludes that in its current shape the Stability and Growth Pact is an insufficient disciplining device in good economic times, with the consequence that there are no fiscal buffers, in particular in high-debt countries, such that growth can be supported in economic troughs. Based on this finding, the paper reviews reform options for making the fiscal framework more effective in bringing about sounder public finances and avoiding the pro-cyclicality observed over the past two decades.

JEL Classification: H11; H50; H6


We thank Alessandro Giovannini, Stephan Haroutunian, Hans-Joachim Klöckers, Patrick Lunz and Sander Tordoir for very helpful comments. Data support from Alessandra Palazzo is gratefully acknowledged.


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The views expressed herein are those of the authors and do not necessarily reflect the views of the ECB and the Eurosystem.

This article is part of the special issue “20 Jahre European Monetary Union” published in the Journal of Economics and Statistics. Access to further articles of this special issue can be obtained at

Received: 2018-10-27
Revised: 2019-03-18
Accepted: 2019-03-19
Published Online: 2019-07-10
Published in Print: 2019-09-25

© 2019 Oldenbourg Wissenschaftsverlag GmbH, Published by De Gruyter Oldenbourg, Berlin/Boston

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