European Commission, (2016), “The 2016 Stability and Convergence Programmes: An Overview and Implications for the Euro Area Fiscal Stance”, European Commission, Institutional Paper 034, September
This paper provides an overview of the current fiscal policy in the euro area and the EU, and at Member State level. It presents an overview of Member States’ 2016 Stability and Convergence Programmes (SCPs) as well as an analysis of the recent and prospective fiscal stance in the euro area. The fiscal stance is assessed analytically and without prejudice to the obligations under the EU fiscal framework. According to both the latest Commission forecast and this year’s SCPs, no further consolidation is expected in 2016 and 2017 in the euro area. In 2016, the fiscal stance is expected to be mildly expansionary. This more supportive orientation of fiscal policy reflects in part a broad-based shift towards policies of cutting taxes, notably, though not exclusively, taxes on labour; albeit revenue-to-GDP ratios remain around 2% of GDP above pre-crisis levels. Gradually more sustained growth of public expenditure within the area, especially so in Germany, also adds to the supportive orientation. In 2017, fiscal adjustment remains close to zero in the euro area, resulting in a broadly neutral fiscal stance. Debtto-GDP ratios are expected to decrease somewhat on the back of a favourable snowball effect and primary balances.
Relevant Posts
- The 2015 Stability and Convergence Programmes-An overview/INSTITUTIONAL PAPER 002 | JULY 2015
- European Commission (2014) “The 2014 Stability and Convergence Programmes: An Overview”, European Economy, Occasional Papers. 199. Ιούλιος 2014: Brussels.