The Euro Crisis – Economic Governance and Budgetary Surveillance

Mr McArdle evaluates measures taken to date by the European Union to improve economic governance and tighten fiscal surveillance. His analysis encompasses the so-called 'six-pack' of economic governance legislation which recently took effect, the European Commission's November 2011 proposals in this area, and the 'fiscal compact' proposed by European leaders at their December summit. He identifies a tension between 'softliners' and 'hardliners' when it comes to the enforcement of budgetary discipline as a solution to the euro crisis. An appendix provides background to recent economic governance measures by re-evaluating the design and implementation of the EU's stability and growth pact as well as considering the 'six-pack' and 'European semester' in closer detail. Pat McArdle is the Co-Chairman of the IIEA's Economists Group and is a former Chief Economist with Ulster Bank. He has previously worked as an Advisor to the Independent Review Panel on the Irish Department of Finance, as a columnist with the Irish Times on economic and financial matters, as the Irish representative on the Economic and Monetary Affairs Committee of the European Banking Federation (EBF), and as an Economist with the Department of Finance. He has also worked extensively with the European Commission and other European institutions throughout his career. This paper forms part of a series of working papers on the euro crisis by leading Irish commentators.

The Euro Crisis – Economic Governance and Budgetary Surveillance

by Pat McArdle

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Mr McArdle evaluates measures taken to date by the European Union to improve economic governance and tighten fiscal surveillance. His analysis encompasses the so-called ‘six-pack’ of economic governance legislation which recently took effect, the European Commission’s November 2011 proposals in this area, and the ‘fiscal compact’ proposed by European leaders at their December summit. He identifies a tension between ‘softliners’ and ‘hardliners’ when it comes to the enforcement of budgetary discipline as a solution to the euro crisis.

An appendix provides background to recent economic governance measures by re-evaluating the design and implementation of the EU’s stability and growth pact as well as considering the ‘six-pack’ and ‘European semester’ in closer detail.

Pat McArdle is the Co-Chairman of the IIEA’s Economists Group and is a former Chief Economist with Ulster Bank. He has previously worked as an Advisor to the Independent Review Panel on the Irish Department of Finance, as a columnist with the Irish Times on economic and financial matters, as the Irish representative on the Economic and Monetary Affairs Committee of the European Banking Federation (EBF), and as an Economist with the Department of Finance. He has also worked extensively with the European Commission and other European institutions throughout his career.

This paper forms part of a series of working papers on the euro crisis by leading Irish commentators.