How to strengthen fiscal surveillance towards a medium-term focus?

This paper was prepared as a contribution to the EFB Annual Conference on 26 February 2021

All EU member states have frameworks with a horizon for fiscal policy making beyond the annual budgetary calendar. These medium-term frameworks differ across countries both in terms of their set-up and stringency. Against this background, the main objective of this paper is to identify best practices for medium-term targets and binding nature.

This paper will assess the characteristics and pre-conditions of the effective medium-term frameworks in the EU, drawing from national experiences. This contribution is particularly relevant in the context of the Recovery and Resilience Facility since its implementation is expected to result in a significant increase in investment projects over the next three years. Moreover, special attention will be given in the contribution of the Independent Fiscal Institutions (IFIs) to fiscal discipline. Finally, the paper will come up with preliminary findings on how to strengthen the medium-term orientation of the budgetary frameworks.