Medium-Term Budgetary Frameworks in the EU Member States

Summary:

The essential role of medium-term budgetary frameworks (MTBFs) in the design and execution of fiscal policy has been acknowledged both by the literature and policymakers. Thus there has been growing focus on endowing budgetary planning with multiannual perspective as short-sighted approach came to be deemed as a poor instrument for fiscal policy management. The growing realisation of the importance of looking at public finances from a medium-term perspective and the observed lack of such practice in a majority of EU Member States triggered introduction of appropriate provisions in the EU legislation, i.e. in the Stability and Growth Pact, the Six-Pack (more precisely, the Budgetary Frameworks Directive) and the Two-Pack. To a large extent in response to these legal requirements, vast majority of Member States either introduced their MTBFs for the first time or revamped them in the recent past.

The purpose of this paper is to stimulate a discussion on the most desirable features of MTBFs in the context of the peer review exercise. Therefore, it should not be regarded as a systematic assessment of national transposition of the relevant provisions of the Budgetary Frameworks Directive. Since the EU legal provisions leave a significant margin of discretion in terms of their transposition.

• Alternative Source 1