Strengthening the role of national IFIs at EU level

A recent paper on the EU Fiscal and Economic Governance Review prepared by the Network of EU IFIs called for “the capacity of national IFIs to make independent objective assessments of national fiscal dynamics and to raise transparency … [to] be used more effectively in the EU fiscal framework.”

At national level, strengthening the mandates and capacity of the IFIs would help to strengthen economic and fiscal governance notably through greater public account transparency and predictability; this, together with other institutional arrangements and ultimately with adequate political commitment should lead to better and more sustainable fiscal outcomes.

At the EU level, a greater role for the national IFIs could improve the assessment of national economic and budgetary conditions, help to inform the use of discretion at EU-level in applying the fiscal rules and help to achieve greater coherence between national and EU-level decisions, helping to strengthen the fiscal governance as a whole. This approach could also reduce the risk that national IFIs are unduly weakened by contradictory assessments at the EU level or vice versa.

This note sets out how the enhanced role for national IFIs - including the proposed obligation on the EU institutions to take IFI input into consideration when taking decisions – could be operationalised. This note focusses on those members of the EU that are members of the euro area. To support these changes, it would be essential to ensure that all national IFIs have sufficient institutional underpinning: a separate note on “Minimum standards and mandates” sets out proposals.