2018年-CEPS欧洲政策研究中心_The_Nine_Lives_of_the_Stability_Pact_56页_270kb

Summary and Overview

This report by the CEPS Macroeconomic Policy Group (MPG) examines the implementation of the Stability and Growth Pact (SGP) and the prohibition of excessive deficits under the Treaty of Maastricht, focusing on the controversy surrounding the ECOFIN Council's refusal to endorse further steps in the excessive deficit procedure (EDP) against France and Germany on 25 November 2003. The report concludes that France and Germany's actions were not a final victory, as the political costs of violating the Treaty will likely increase unless they adjust their fiscal policies.

The report is divided into three parts:

• Part I discusses the legal and institutional challenges of the EDP and the implications of ECOFIN's decision.
• Part II outlines the economic arguments for maintaining strict fiscal discipline, especially in the context of low potential growth in the EU.
• Part III proposes ways to strengthen the enforcement of the SGP and reduce political interference in the fiscal process.

Key Policy Conclusions

1. The core issue is the Treaty's prohibition on excessive deficits, not the Stability Pact itself. The 3% GDP deficit limit is crucial and should not be altered.
2. The European Commission's powers in the EDP should be enhanced, particularly in terms of budget monitoring and forecasting.
3. To prevent future conflicts, the EDP should be monitored more closely during periods of economic growth, and non-compliance should carry political consequences.
4. The SGP is not dead, and premature calls for its reform are misleading. The SGP remains relevant, especially as it ensures compliance with the Treaty.
5. Current fiscal policies in France and Germany are unsustainable, leading to increasing debt levels. Even under a revised SGP, these countries would still need to be held accountable.
6. The ECOFIN decision on 25 November 2003 was not legally binding, and the use of the word "decided" in the Council Conclusions was misleading. It did not constitute a formal decision under Article 104 of the Treaty.
7. The EU rules do not force pro-cyclical policies, and the ECOFIN decision did not prevent the necessary fiscal adjustments.
8. The principle "Pacta sunt servanda" (agreements must be kept) is essential, and undermining it sets a dangerous precedent for the EU's institutional integrity.

The Controversy of 25 November 2003

The ECOFIN Council refused to endorse further steps in the EDP against France and Germany, despite their failure to meet the 3% deficit limit. This decision was not a binding legal act but rather a political one, and the Commission has since challenged its validity through legal means.

The EDP is a complex procedure outlined in Article 104 of the Treaty, which includes the following key steps:

• Step 1: The Commission prepares a report if a member state fails to meet the deficit criteria.
• Step 2: The Monetary Committee provides an opinion on the Commission's report.
• Step 3: The Commission addresses its opinion to the Council if it finds an excessive deficit.
• Step 4: The Council, acting by qualified majority, decides whether an excessive deficit exists.
• Step 5: The Council makes recommendations to the member state to correct the deficit.
• Step 6: If the member state fails to act, the Council may make its recommendations public.
• Step 7: If the member state still fails to comply, the Council may impose sanctions, including fines and requiring additional information before issuing bonds.

The EDP was initiated in 2003 due to the 2002 deficit levels of Germany and France exceeding the 3% limit. Both countries had accepted recommendations to reduce their deficits in 2003, but by November 2003, deficits had not only remained above the limit but had increased. The ECOFIN decision to "hold in abeyance" the EDP for France and Germany was not a final resolution, but rather a temporary pause. The Commission was prepared to resume the procedure in early 2004 based on Germany's bi-annual Stability Programme update.

Economic Issues

The report highlights that the EU's current low potential growth makes the prohibition on excessive deficits even more important. Sustaining current fiscal policies would lead to unsustainable debt accumulation in France and Germany. The SGP, while not perfect, plays a vital role in ensuring fiscal discipline and preventing pro-cyclical policies.

The cyclically adjusted deficit is a key metric used to assess the true state of a country's fiscal position, adjusting for economic cycles. The Commission's forecasts for 2003 showed significant errors, which may have contributed to the confusion and lack of preparedness in both Germany and France.

The report argues that peer pressure and early warnings are more effective than sanctions in ensuring compliance with fiscal rules. It also suggests that improving the accuracy of budget forecasts is essential for the effective implementation of the EDP.

What to Do?

To ensure the long-term effectiveness of the SGP and the EDP, the report proposes the following actions:

• Enhance the Commission's monitoring and forecasting capabilities, to provide more accurate and reliable assessments of member states' fiscal positions.
• Strengthen the early warning system by making it more objective and reducing political influence.
• Ensure that the EDP is not undermined by political decisions, and that legal procedures are followed correctly.
• Maintain the 3% deficit limit, as it is a critical safeguard against unsustainable fiscal policies.
• Avoid weakening the SGP and instead focus on improving its enforcement mechanisms.

The report concludes that the SGP is not only necessary but also needs to be more rigorously enforced to ensure that EU member states, particularly Germany and France, adhere to fiscal discipline and avoid the risk of excessive debt accumulation.