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A Stability Pact for Public Debt?. CEPS Policy Brief No. 30, January 2003

Gros, Daniel. (2003) A Stability Pact for Public Debt?. CEPS Policy Brief No. 30, January 2003. [Policy Paper]

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    Abstract

    There is an urgent need to link the excessive deficit procedure with the issue of sustainability and hence the evolution of public debt. This note shows that there exists a simple way to introduce the evolution of public debt in the Stability Pact, which so far has focused exclusively on deficits. The link starts from the Maastricht criterion for participation in EMU concerning public debt and its reference value of 60% of GDP. The Maastricht criterion on public debt stipulates that if public debt exceeds 60% of GDP, it must be ‘sufficiently diminishing and approaching the reference value at a satisfactory pace’'. This note provides a numerical rule for evaluating whether public debt is indeed diminishing ‘at a satisfactory pace’. This numerical rule is in accordance with the reference values in the Treaty and could be used as the basis for an ‘excessive debt procedure’.

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    Item Type: Policy Paper
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > economic and financial affairs > Stability and Growth Pact
    Subjects for EU documents: UNSPECIFIED
    EU Series: UNSPECIFIED
    ["eprint_fieldname_eusries" not defined]: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Centre for European Policy Studies (Brussels) > CEPS Policy Briefs
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 21 Oct 2004
    Page Range: p. 8
    Last Modified: 15 Feb 2011 17:20
    URI: http://aei.pitt.edu/id/eprint/1981

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