Press Release: Public Finance Report 2002: Commission urges member states to consolidate stability and shift emphasis on growth

In a Communication on the state of public finances in EMU, 'Public Finances in EMU 2002', the European Commission confirmed that sound budgetary management is at the forefront of EU priorities, and an essential element in achieving the employment and growth objectives of the Lisbon strategy. It is also essential to broaden the debate on fiscal policy in EMU from its focus on stability towards the positive contribution which public finances can make to growth and employment. The effect of the economic slowdown has resulted in a rise in the deficit levels of most Member States and the euro area as a whole. Nonetheless, the framework for budgetary surveillance and in particular the Stability and Growth Pact (SGP) has worked reasonably well. Countries have had scope to allow the automatic stabilisers to operate and cushion the effects of the downturn, and past mistakes of unwarranted expansionary policies were avoided. However, it is vital that the process of budgetary consolidation resumes so that all countries reach the medium-term goal of the SGP of budget positions that are close to balance or in surplus. This is particularly important if Member States are to credibly meet the future budgetary costs associated with ageing populations.

http://ec.europa.eu/comm/economy_finance/publications/european_economy/public_finances2002_en.htm http://ec.europa.eu/comm/economy_finance/publications/european_economy/public_finances2002_en.htm

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