Sustainability of public finances is the key

21/11/2011

Source: europa.eu

The economic crisis has taken a heavy toll on EU Member States' public finances, making debt sustainability a major challenge across the Union. At the same time, a major overhaul of EU fiscal surveillance is underway. The 2011 Report on the Public Finances in EMU takes a look at the recent developments in public finances, analyses new ways of assessing debt sustainability and describes the changes to budgetary surveillance in the EU. These reforms put prevention and debt reduction at the centre of EU budgetary surveillance, reflecting on the lessons of the crisis.

"In a period of high and still increasing debt levels in EU countries, ensuring the sustainability of public finances is a prerequisite for enduring economic growth and job creation. The EU strategy of gradual, differentiated fiscal consolidation remains valid in the face of persistent market turbulence and uncertainty about the speed of recovery. The Member States facing market pressures must continue to deliver on reaching their fiscal targets, and take additional measures if needed. Member States with fiscal room of manoeuvre should allow automatic stabilisers to function to mitigate the effects of a slowdown of the recovery on activity and jobs while sticking to their structural adjustment paths. The recent developments underline the importance of adopting very soon the legislative package to reinforce our economic governance", said Economic and Monetary Affairs Commissioner, Olli Rehn.

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