What are independent fiscal institutions?
Independent fiscal institutions* are defined as non partisan public bodies, other than the central bank, government or parliament that prepare macroeconomic forecasts for the budget, monitor fiscal performance and/or advise the government on fiscal policy matters. These institutions are primarily financed by public funds and are functionally independent vis-à-vis fiscal authorities. Courts of Auditors are included in this definition if their activities go beyond the accounting control and cover any of the tasks mentioned above.
In a number of EU Member States these institutions (also called fiscal councils) have proved to be instrumental in improving fiscal policy making by providing positive and/or normative analysis, assessments, and recommendations in the area of fiscal policy. In particular, fiscal institutions can provide macroeconomic forecasts for the budget preparation that do not suffer from the optimistic biases sometimes found in official government forecasts; they may impartially monitor the implementation of budget plans and the respect of budgetary objectives; they may raise awareness about short and long-term costs and benefits of budgetary measures both among policy-makers and the public, and finally they can assess whether fiscal measures are appropriate in terms of respect of rules, sustainability of public finances, and stability-oriented fiscal policies.
The Commission services have compiled a broad set of information on national independent fiscal institutions in the EU countries through a comprehensive survey launched in 2006 across Member States. This survey compiled information related to the main characteristics of these domestic public bodies covering their mandates and functions, the composition of their governing boards, their formal status vis-à-vis government or parliament, and their media visibility and influence on public debates on fiscal policy. A first update of the database was made in 2008. Following the April 2009 Council Conclusions, it is being updated annually. The latest vintage of the database is from the 2013 update. Information pertaining to 2014 was also collected through a survey. However, it has not been included in the database owing to ongoing work of the Commission services to improve the quantitative reporting of the information.
In 2014 there were 47 independent fiscal institutions and other fiscal institutions operating in 25 Member States, up from 43 in 2013. In Spain and Italy independent fiscal institutions already set up in 2013 became operational, new institutions were reported in Cyprus, Luxembourg and the Netherlands, and some existing ones were reformed in Austria, Belgium, Netherlands, Romania and the United Kingdom. A few other IFIs established in 2015 or still to be set-up are expected to be reported in future surveys.
(*) The definition of independent fiscal institutions has been used since 2006 for the purpose of selecting institutions present in the database and as a result it differs in certain respects from the definition of independent fiscal institutions that emerged from the new EU legal requirements gradually put in place since 2011.