Reforming the Stability and Growth Pact

Abstract:

The recent reform of the Stability and Growth Pact ("SGP"), which is limited to an amendment of secondary Community law, cannot remedy the basic shortcomings of the rules in place. Although the reform results in some stricter obligations for the Member States and a sharpening of the multilateral surveillance procedure, a more flexible approach in dealing with excessive deficits in the Member States is introduced. As some of the new Member States are likely to join the ranks of some of the old Member States, especially the larger ones, in frequently running excessive deficits, lack of enforcement will be aggravated.

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