Advertisement

Excessive Deficit Procedure

  • Joaquim Miranda Sarmento
Chapter
Part of the Financial and Monetary Policy Studies book series (FMPS, volume 47)

Abstract

The Excessive Deficit Procedure (EDP) consists in the operationalisation of the surveillance present in the Stability and Growth Pact and in the Fiscal Compact. The calculation of the deficit and the public debt, for purposes of the EDP, is carried out in the National Accounts. However, the rules for the calculation of the public debt in the EDP are slightly different from those of the ESA 2010. The opening of an EDP results from the situation of a Member State having violated the deficit limit of 3% of GDP, except in the exceptional circumstances defined in the Stability and Growth Pact (see Chap.  1). Once an EDP has been opened, the country commits to taking measures with the objective of closing the procedure, which can only occur when the fiscal deficit returns to below 3%. The EDP has a preventive arm, and consequently in March and September of each year, all Member States have to communicate their government’s accounts.

References

  1. Balassone F, Fabrizio S, Franco D et al (2006) EMU fiscal indicators: a misleading compass? Empirica 33:63–87CrossRefGoogle Scholar
  2. Balassone F, Fabrizio S, Franco D, et al (2007) The reliability of EMU fiscal indicators: risks and safeguards. Temi di Discussione 633, Banca d’Italia, Rome. http://wp.peio.me/wpcontent/uploads/2014/04/Conf1_Balassone.Franco.Zotteri_Reliability.pdf. Accessed 1 Feb 2016
  3. Belke A (2017) The fiscal compact and the excessive deficit procedure: relics of bygone times? In: da Costa Cabral N et al (eds) The Euro and the crisis, financial and monetary policy studies, vol 43. Springer, Heidelberg, pp 131–152Google Scholar
  4. Castro F, Perez J, Rodriguez-Vives M (2013) Fiscal data revisions in Europe. J Money Credit Bank 45(6):1187–1209CrossRefGoogle Scholar
  5. Kohen V, Van den Noord P (2005) Fiscal gimmickry in Europe: one-off measures and creative accounting. OECD Economics Department Working Papers, 417Google Scholar

Copyright information

© Springer Nature Switzerland AG 2018

Authors and Affiliations

  • Joaquim Miranda Sarmento
    • 1
  1. 1.ISEG Lisbon School of Economics and ManagementUniversity of LisbonLisbonPortugal

Personalised recommendations