The stability and Growth Pact in Practice: inefficiencies of previous debt rules and the way forward

Abstract

This paper aims to assess the compliance of the EU Member States with the previous debt rules over the period 2011-2023. To achieve this, we assessed two complementary criteria concerning public debt, respectively the compliance with the 60% of GDP threshold and the one related to the debt reduction rule, which indicates that Member States with public debt levels higher than 60% of GDP should reduce the difference between the level of public debt share in GDP and the 60% of GDP threshold with an average rate of 1/20 in the last three years. Further, we highlighted the reasons why the last economic governance framework was not effective and we presented the new debt rules in their revised form.

Keywords

• stability and growth pact
• public debt
• rules
• fiscal
• economic governance review