What is this Board and what it does?
Following the Five Presidents' Report on completing Europe's Economic and Monetary Union, the Commission decided in October 2015 to set up a European Fiscal Board as an independent advisory board on fiscal matters.
Its mandate is to advise the Commission on fiscal matters. More specifically, the board's role is to evaluate the implementation of EU fiscal rules, to advise the Commission on the fiscal stance appropriate for the euro area as a whole and to cooperate with Member States' national fiscal councils. Upon request, the board would also provides ad-hoc advice on fiscal policy matters to the Commission.
The European Fiscal Board consists of a Chair and four Members, and is supported by a Secretariat. The Chair and Members are experts on fiscal policy, public finances and macroeconomics, with experience in European economic governance and the EU's fiscal rules.
Why has it been set up?
The post-2007 economic and financial crisis highlighted the importance for Member States to implement responsible fiscal policies, which reconcile the imperative of sustainable public finances with the need for economic stabilisation. This is particularly important for the euro area. The Board provides to the Commission an evaluation of the implementation of the EU fiscal rules, including the appropriateness of the actual fiscal stance at euro area and national level.
When was the Board established?
The Board started to work on 20 October 2016. Its first meeting was on the 3 November 2016. In generally, it meets once per month or more if necessary.
In April 2019, the European Commission decided to renew the mandate of the European Fiscal Board for a second and final three-year period taking effect on 20 October 2019.
How are the Members selected?
The selection process for Board Members has been conducted in full transparency, with an open call for expression of interest. It was open for several weeks and numerous excellent candidates from across the EU applied. A selection panel, composed of high-level officials from the Commission and the Council of Ministers, conducted interviews and shortlisted candidates to serve as Chair and Board Members.
The Chair and one Member have been appointed by the Commission upon proposal of the President, after having consulted the Vice-President for the Euro and Social Dialogue, also responsible for Financial Stability, Financial Services and Capital Markets Union, and the Commissioner for Economic and Financial Affairs, Taxation and Customs.The European Central Bank, the Eurogroup Working Group and the national fiscal councils were consulted on the remaining three members.
What are the criteria for selecting the Members of the Board?
The criteria for assessing applications include:
- Proven and relevant competence and experience of the applicants demonstrating that they are respected international experts as regards macroeconomics, public finances, fiscal policy and budgetary management;
- Deep understanding of the EU fiscal rules and its role for the functioning of the EU and EMU;
- Proven and relevant competence and experience with economic policy making; preferably gained from work in policy-making institutions, policy-advising institutions or academia;
- Knowledge of the EU institutions and EU decision making processes and the role of the European Commission.
- Experience in carrying out economic analysis from a horizontal, cross-country perspective would be an asset.
The selection aimes to strike a balance in terms of the representativeness of applicants, gender and geographical origin, taking into account the specific tasks of the European Fiscal Board and the type of expertise required.
Is the board independent or part of the Commission?
The Members of the Board are required to act independently and neither seek, nor take instructions from, any EU or national institution, bodies or governments, including the European Commission. They are obliged to disclose any potential conflict of interest. The impartiality of the Board's advice is safeguarded by its balanced composition which presents a diversity of experiences, backgrounds and views.
The advisory European Fiscal Board is independent. The Board Members are not employees of the Commission and are committed to providing independent expertise. While practical administrative reasons make it necessary to attach the Secretariat of the Board to the Commission, for instance to access similar data, the Board has been carefully designed as a fully autonomous body.
The Board's mandate and set-up were set out transparently in the Commission's Decision No 1937 of 21 October 2015. Its mandate and independence therefore have a clear legal basis, in line with best practices for independent bodies. The Commission Decision includes strong independence safeguards inspired by the experience of setting up the national fiscal councils.
The Board determines its own working methods by adopting its own rules of procedure and freely organises its activities. As set out in the College decision from 21 October 2015, the secretariat is administratively attached to the Commission's Secretariat-General.
Why doesn't the Board take fiscal decisions?
The Five Presidents' Report clearly states that the Board: "should advise, not implement policy. Enforcing the rules should remain the task of the European Commission."
The Commission's mandate is based in the EU Treaty, where each institution's roles in economic and monetary policymaking are clearly outlined. A 'fully independent expert body' cannot take fiscal decisions because this would infringe on the prerogatives of the various EU institutions, including accountability and decision-making procedures set out in the Treaty.
In this respect, it is important not to mix up the role of the Board set up at EU level to advise the Commission with that of the national fiscal councils set up at national level. Those councils perform specific tasks linked to national budgetary processes, which do not exist at EU level.
Are the Board's opinions public?
In line with the Commission decision (art. 6) establishing the Board, the Board publishes an annual report of its activities, which includes summaries of its advice and evaluations rendered to the Commission. It also publishes report assessing the general orientation of fiscal policy in the euro area.
Does the Board has adequate resources?
A Memorandum of Understanding was signed between the Board and relevant Commission services. A secretariat provides the Board with technical and practical support.
What is the relationship between the Board and national fiscal councils?
All Member States are required to have national fiscal councils under the "two-pack" regulations. National fiscal councils are independent bodies, which monitor compliance with national fiscal rules in the Member States.
The Board does not interfere with the work of national fiscal councils, but cooperates with them, particularly in the exchange of best practices and facilitating common understanding on matters related to EU fiscal rules. Such cooperation benefits and strengthen both the Board and national fiscal councils.