Mandatory Balanced Budget in Dutch Legislation Following Examples Abroad?

Abstract

On 2 March 2012, 25 EU Member States (excluding the United Kingdom and the Czech Republic, for the time being) signed what is known as the Fiscal Compact. The objective of this treaty is to tighten budgetary discipline within the European Union. This is achieved mainly through the introduction of a ‘balanced budget rule’ – the obligation to maintain balance in national budgets. This balanced budget rule should be incorporated into national law, preferably constitutional, within one year of the treaty coming into force. This rule introduces actual – substantive – conditions for national budgets. What can be expected as a result of incorporating this balanced budget rule – also known as the golden rule – in Dutch (constitutional) law? In order to review the effectiveness of a golden rule in Dutch legislation in this paper we will also take a look beyond our borders, especially to the United States and Germany. Experiences in the United States and Germany show that the value of statutory and constitutional measures in controlling the national economy should not be overestimated. The Dutch golden rule will be assessed in the light of the experiences from Germany and the United States – what general lessons can we learn from the examples in the United Stated and Germany? And – where possible – certain proposals will be made to ensure that the Dutch golden rule is as effective as possible in light of the Dutch constitutional system.