How can a reform of the Stability and Growth Pact foster sound fiscal policies?


The EU Commission is currently reviewing the legal framework for economic governance in the EU, in particular the Stability and Growth Pact (SGP). In order to give the member states more fiscal room for manoeuvre in the corona crisis, the SGP was also suspended in March. A cepInput advocates a simplification of the SGP.


The SGP is repeatedly criticised because member states do not abide by its rules. However, compliance with the rules is important, as the Corona crisis will lead to a sharp increase in the debts of the Member States. In order for Member States to be able to orient themselves better to the rules of the SGP, the numerous escape  clauses contained in it should be reduced. And not the Commission, but an independent body should in future monitor the rules of the SGP.