Abstract
The current economic crisis has called for huge fiscal efforts to avoid a deflationary spiral. In the context of the crisis, the national fiscal frameworks may play an important role in sustaining budgetary retrenchment. Therefore, the need for a fiscal consolidation, meaning a well-designed fiscal and budgetary policy is a challenge for all EU Member States. Moreover, the importance of strong and resilient fiscal frameworks has been emphasised by the October 2009 Council conclusions on the fiscal exit strategy. On this premise, the paper discusses what elements and considerations should be taken into account more carefully in designing resilient fiscal frameworks so as to support optimal policy-making and to promote the respect of the Stability and Growth Pact provisions. The unit analysis consists on several EU Member States, affected by economic crisis. Taking into consideration the aim of the paper, the research methodology is based on a case study as research strategy, and uses the triangulation method to obtain confirmation of findings through convergence of different perspective. Regarding the qualitative research, the authors use theoretical framework, legal analyses, systematic and analytical collecting data from official written sources, and macroeconomic indicators for quantitative aspects. Keywords: budgetary framework, restructuring process, governmental measures and policies.
Highlights
In the context of which, almost all Member States of European Union have been hit by economic crisis, adopting a medium-term budgetary framework becomes necessary to substantiate any measure of reform, but especially, the state fiscal policy
Taking into account all of this, in the recovery programs nationally adopted by numerous countries, and in those promoted by international organizations such as the European Commission or the International Monetary Fund or Organisation for Economic Co-operation and Development have been pointed out that medium-term budgetary framework represents a tool for supporting policy-making process to budget, and ensuring a continuous quality improvement of public finances
In order to ensure the respect of objectives, they stress the importance of national rules and institutions for budgetary discipline, because the national fiscal rules and medium- term budgetary frameworks can provide credibility, transparency and medium-term orientation to fiscal policy making in times when difficult choices need to be made
Summary
In the context of which, almost all Member States of European Union have been hit by economic crisis, adopting a medium-term budgetary framework becomes necessary to substantiate any measure of reform, but especially, the state fiscal policy. In this sense, is obvious that budgeting needs to be closely to policy-making process, because otherwise the policy-making are not constrained by strategic priorities and resource availability (Spackman, 2002: 4) According to this perspective, medium-term budgetary framework (MTBF) was defined by Lundback as „a framework that regulates policymakers’ formulation and implementation of medium-term/multiyear fiscal policies”. The MTDF is defined differently by several authors, the European legislation outlines a series of fundamental elements: comprehensive and transparent multiannual budgetary objectives in terms of the general government deficit, debt and any other summary fiscal indicator such as expenditure, ensuring that these are consistent with any numerical fiscal rules in force; projections of each major expenditure and revenue item of the general government with more specifications on the central government and social security level, for the budget year and beyond, based on unchanged policies;. We emphasise main types of MTBF, namely (Batusaru, Otetea, Banu, 2014: 272): (1) flexible MTBF, and (2) fixed MTBF
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