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This article was published April 24, 2016 at 7:59.
amsterdam
in an economic environment marked by considerable uncertainty and in a political context characterized by obvious euroscepticism, the Twenty-eight yesterday started to discuss a possible simplification of the Stability and Growth Pact, to make it both more effective and more transparent. The decision also comes as Italy has suggested in recent weeks, collecting consensus among partners, to review some of the parameters on which is based the analysis of public finances.
The finance ministers discussed yesterday here in Amsterdam, where we held an informal two-day meeting of Ecofin, of a Dutch proposal for simplification of the Covenant. The Dutch Finance Minister Jeroen Dijsselbloem, which in addition to chairing the Eurogroup is also in the first half of 2016 the President of Ecofin, explained that there is between the Ministers ‘strong agreement’ to improve ‘predictability and l’ effectiveness “of a treaty now considered” complex “.
Among the twenty-eight, there is” unanimous consensus that the Stability Pact is complicated, non-transparent and inflexible as the economy changes, enters in a recession, likely deflation with an impact on the assessment of fiscal imbalances, “said Economy Minister Pier Carlo Padoan, in a press conference reiterated that a majority of the Twenty-eight has no desire to introduce European limits on the presence of titles State in bank balance sheets (see Il Sole 24 Ore yesterday).
Two issues raised by the EU Dutch Presidency and now will be studied at the technical level. The first is the parameter to follow in assessing the performance of public accounts. The structural deficit, ie the deficit net of the economic cycle, is considered far too volatile and difficult to explain. “We want to reduce the number of indicators and focus on what more simple; for example the evolution of public spending, “he said Dijsselbloem on behalf of his colleagues.
” Public spending has the advantage of being an indicator in the hands of governments, “added the Dutch politician , therefore easier to master. The second issue is the time perspective. The ministers have agreed to try to analyze national public accounts not only in the short term, but also in the medium term. Simplification of the Covenant will deal now on a technical level, the Twenty-eight, together with the European Commission.
Also yesterday, the ministers discussed the request of Italy and seven other countries to align two to four years, the ‘ time horizon of the Community estimates of the output gap, ie the estimate of potential growth and actual growth is also used to assess the trend of the deficit. “The request seems to me correct,” said Dijsselbloem, asking the Commission to see if the road is passable. Currently, there is a gap between EU estimates over two years and national estimates on four.
According to the Minister Padoan, this difference “is a source of confusion and errors” in the development of policies point national economic, in collaboration with Brussels. In this way, Italy would also like to review the method of calculating the output gap, a complicated concept that reflects well the complexity of the Covenant, but this aspect is less well understood from a political point of view because of the changes are likely to benefit some countries to the detriment of others.
However, the idea of simplifying the Covenant does not mean wanting to change again. He pointed Dijsselbloem: “We want to preserve it as it still trusted.” The goal is not to relax the rules, but to make them easier to understand for the general public. That said, political and economic situation in the context are causing the European establishment to assess with greater flexibility in the public accounts. Brussels said it would look with magnanimity impact on the security for deficit spending.
Finally, altogether different, also yesterday, ministers discussed fraud to damage the value added tax and the Action Plan presented by Brussels with a series of options to modify the collection of fee (see Il Sole 24 Ore 8 April). “A majority of countries are in favor, two against – Austria and Czech Republic -, others required a feasibility study,” summed up the same Dijsselbloem, who announced new discussions in the coming ministerial meetings.
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