Maastricht Criteria versus Stability Pact

Tumbling Giant: Germany’s Experience with the Maastricht Fiscal Criteria

The Maastricht criteria and the Euro: Has the convergence continued?

We analyze the performance of the Maastricht convergence criteria (inflation, long-term interest rate, annual and overall public debt) of the European Monetary Union (EMU) that led to the introduction of the Euro on Jan. 1 1999 as book currency. Defining 3 regimes, 1992-97, 1997-1999 and 2000-2001, we analyse convergence properties, like a smooth or a rough transition in the mean or variance sh...

The Stability and Growth Pact: Problems and a Possible Solution

1. Executive Summary In this note, I describe why we need a European …scal framework. I specify what it means for a government’s …scal policy to be sustainable. I argue that while the current European …scal framework is likely to promote sustainable …scal policies, if it is enforced, it is also apt to force countries to follow suboptimal …scal policies. I explain why there is no …scal rule that...

Should Europe Get Rid of the Stability and Growth Pact?

The paper addresses the question of the abolition of the Stability and Growth Pact. More and more authors and policymakers are arising the negative impacts of the European deficit rule on the countries and their ability to respond an asymmetric economic shock. Some others are asking for a redefinition of the Pact. If the focus is only fiscal and in light of the non-respect of the Pact by two of...

Reforming the Stability and Growth Pact in Times of Crisis

It is a commonplace that the mechanisms established in the stability and growth pact are blunt instruments. They are highly politicised as both the establishment of infringements and possible sanctions are subject to votes in the EU Council. The financial crisis of 2009/10 has dramatically altered the financial situation of many EU member states and has also shown the need for new regulatory in...