The “New” Stability and Growth Pact: More Flexible, Less Stupid?

The doubts and criticisms with regard to the fi scal discipline imposed by the Stability and Growth Pact (SGP) have been many and varied, and the SGP was revised as a result. The following paper evaluates the changes contained in the “new” SGP by considering the properties for ideal fi scal rules put forward by Kopits and Symansky. The analysis points towards a clear increase in fl exibility together with the probable emergence of new enforcement problems. In this context, the need for new improvements within the European framework for the defi nition and implementation of national fi scal policies is discussed.

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