Numerical compliance with EU fiscal rules: The compliance database of the Secretariat of the European Fiscal Board

EU fiscal rules are meant to keep public finances on a sustainable path. This paper presents a new database that tracks numerical compliance with the four main rules of the Stability and Growth Pact. The database is updated annually and currently covers 1998 – 2019. Our assessment of numerical compliance abstracts from the many exceptions and elements of discretion allowed by the letter and the spirit of the law. It focuses on the main course of action implied by the rules. Overall, our database points to a mixed compliance record. On average – across countries, years and rules – budgetary policies of the EU Member States are compliant in just over half of the cases; differences across countries are stark and persistent. Compliance with the deficit and the debt rule is procyclical: It automatically improves during upturns fuelling a sense of safety, while rules implying a more stable course of action receive less attention. A reversal takes place during downturns. Weaker compliance is typically associated with higher average shortfalls from the rules and – as deviations accumulate over time – with a higher government debt-to-GDP ratio. Better compliance is positively correlated with the quality of governing institutions. Disclaimer: The views expressed in this paper do not necessarily reflect the position of the European Commission. Acknowledgements: We would like to express our gratitude to Carlos de la Calleja LLado and Laurent Jacques Corveleyn for helping us with developing a user-friendly web tool to access our database of numerical compliance.