Budgets in EU countries in much better shape but further action required for healthier public finances
There is no room for complacency on public finances in the EU. Despite marked improvements in budget balances in 2007, governments should act now to ensure sustainable finances, long-term economic growth and the smooth functioning of the euro. That is the basic message in the new Commission paper on public finances.
EU governments have significant scope for action. The 2008 Commission report on public finances calls for a holistic approach to fiscal policy – especially more efficient taxing and spending – to promote growth and competitiveness.
Building on the 2005 reform of the Stability and Growth Pact and the recent analysis reviewing ten years of the euro, the report also put forward some ideas for maintaining the focus on healthy public finances in national budget policies: