Review of the EU economic governance framework: a focus on the revision of the SGP fiscal rules - Carlo Cottarelli and Giampaolo Galli - Osservatorio CPI

This note discusses how the European fiscal rules included in the Stability and Growth Pact (SGP) should be redesigned from an economic point of view. It does not attempt to assess whether redesigning those rules along the lines suggested below would require a Treaty change. We leave this task to legal experts. However, we note that, over the last two decades, deep changes in the design of the European fiscal rules were introduced with no need for changing the Treaty. We trust that this could be the case again. The focus is on redesigning the fiscal rules, while we do not discuss the issue of the penalties attached to a breach of the rules.

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