Talk:European Fiscal Compact/Archive 6

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Minimum MTOs (request for weblinks)

I have now updated the latest round of national Medium-Term budgetary Objectives over at the SGP article. In 2015 the Commission will conduct a recalculation of the country-specific "minimum MTO" each state needs to respect starting from the next upcoming 2016 fiscal year, on basis of parameters published in the upcoming Ageing Report (May 2015) and the following update of output-gap budget semi-elasticities (likely awaiting the newest revision of the government's historical fiscal data and national account data, reported by Eurostat on 1 October 2015). However, looking back at how this recalculation procedure took off last time it ran, the new updated "minimum MTO"s were never uploaded to the web (made public). The Public finances in EMU 2013 report just notified, that new updated "minimum MTO"s had been approved and communicated to the Member States through this document:

• The 2012 Update of the Minimum Medium Term Objectives, Note for the Alternates of the Economic and Financial Committee, agreed on 26 October 2012.

I attempted hard to find the above document, but could not find it on the web. By reading the staff working document assessing the Stability programmes, I learned the document had calculated a "+0.25% minimum MTO" for Slovenia, which meant their nationally selected MTO in 2013 at 0.0%, at first was found to be in discompliance with the SGP minimum requirement. A later implementation of structural reforms which improved its fiscal sustainability outlook, followed by a new subsequent extraordinary recalculation of the Slovenian minimum MTO conducted in Autumn 2013, however resulted in the SGP-required "Minimum MTO" now being calculated to 0.0% (this observation can be inferred, as it was explicit confirmed by next years staff assessment report - published in May 2014 - that its country-specific MTO at 0.0% now was in full compliance with the SGP-required Minimum MTO applying for Slovenia in 2014+2015). In case any of you find weblinks for the two updated "minimum MTO" calculations in respectively 2012 and 2015, then please post them here in this debate. Danish Expert (talk) 16:13, 13 April 2015 (UTC)

A secondary implicit source (the annual Financial status report published by the Danish Ministry of Finance in January 2014, see Appendiks 7A), outline how the 2012 Minimum MTO (and implemented methodical changes compared to the calculated 2009 Minimum MTOs) was calculated for Denmark. Likewise, it is expected the next Danish Financial status report in January 2016, will provide details about how the new Danish Minimum MTO valid for 2016-18 was calculated by the Commission in October 2015. This secondary Danish source, of course is not good enough. We still need someone to find weblinks for the primary source (the Minimum MTO note published by the Alternates of the Economic and Financial Committee), before we can mention this by greater (more factual) detail in the SGP + Fiscal Compact article. Please, help me find the primary source. :-) Danish Expert (talk) 11:46, 20 April 2015 (UTC)

Fiscal compliance table (concept and time schedule)

The EC assessment procedures are kind of messy, which made it difficult to develop a comprehensible Fiscal compliance table. To clarify it in short:

• States with a red color in the table, are those being found in the latest "assessment round" to possess an "apparent 126(6) EDP breach" of either the 3%-deficit-limit or 60% debt-limit / debt-reduction-rule, which will trigger the launch of a 126(3) report - conducting a more in-depth investigation to decide if the breach was real (and only if this is the case, it would then lead to the opening up of an EDP - through a subsequent publication of a 126(6) report).

So far so good. But we now still has the problem, that "assessment timings" differs for eurozone states and non-eurozone states, plus the fact that the latest 126(3) reports towards eurozone states were postponed from November to February (meaning the investigation was not conducted of "November-forecast figures" but now on "February-forecast figures". Hopefully the postponement of 126(3) reports was a single incident, which will not repeat again in the future. The latest round of assessments (based on "February-forecast figures"), included the 126(7) report recommending a two-year EDP prolongation for France and three 126(3) reports finding there was no 126(6) EDP breach for Finland, Belgium and Italy.

However, our problem still is, that no assessment reports were released for all the remaining 24 states. The next full round of assessment for all 28 states, will only be conducted during the upcoming May-July assessment cycle (based on the "May-forecast figures" and the "Stability and Convergence Reports" submitted in April). For a non-eurozone state like Bulgaria, this mean, that despite the Commission became aware this state had an "apparent 126(6) EDP breach" already in November 2014 (because of its nominal deficit forecast to reach 3.7% during the 2013-15 period, breaching the 3%-limit), the investigation of this apparent breach by a 126(3) report will only take place when the Commission become aware of the upcoming "May-forecast figures" as part of concluding the Spring Semester. Kind of messy. The process would be much more clear and transparent if the Commission towards all Member States issued the 126(3) reports within 1 month after detecting an apparent 126(6) EDP breach. Unfortunately this is not the case. Not sure how exactly we shall deal with this. One option could be to create a technical note explaining this uncertain "waiting game" - along with noting the fact that no issuance of 126(3) reports for eurozone states within one-month of the intermediate-assessments conducted in November and February means the findings of the "latest assessment round" still prevails for the concerned state. Another second option could be only to update the Fiscal compliance table annually - only featuring data from the latest full "May-July assessment cycle". I tend to favor the first option, but have not written any note (yet), because of being a bit in doubt whether or not the Commission possess any written standard about the timing for their issuance of 126(3) reports. If you have knowledge about any written "code of conduct" or "regulation" setting the rules for this "timing issue", respectively for eurozone states and non-eurozone states, then please let me know. Danish Expert (talk) 09:41, 5 April 2015 (UTC)

Now when the Spring forecast has been published, I will take action and update the table accordingly (within the next 24 hours). For a start, I have now updated the Medium-Term budgetary Objective compliance table and fully explained over in that article how "Minimum MTOs" are calculated (including some detailed formula boxes). The overall number of EU-states having reached their nationally selected MTO were: 2010=1, 2011=4, 2012=6, 2013=6, 2014=9 and 2015=6. So the progress seem to have stopped in 2015 (at least temporarily). The 2015 MTO column from the table, is the same one we display in the "compliance table" here at the Fiscal Compact table. Although, I am right now considering perhaps also to add a small parenthesis to note whether or not the state complied with the additional "expenditure benchmark" in the same column. Danish Expert (talk) 19:57, 10 May 2015 (UTC)

The Spring Forecast has been published for a while now, and the EDP for Malta and Poland were closed on June 19th. Ambi Valent (talk) 11:16, 25 June 2015 (UTC)

Table for the period 2014-2016

Okay, here's the table with data for the period 2014-2016. EDP is up to date with new dates for Spain and Portugal. Debt, deficit and structural deficit numbers are from the Spring forecast 2016, with debt numbers from 2014 and deficit numbers the worst numbers from 2014-2016. I wasn't sure about debt compliance, so there might be changes needed in that regard.

I check forwards- and backwards-debt-compliance, and Malta and the Netherlands appear forwards-compliant, so I moved them from red to yellow.

OK, getting ready to merge it now... Ambi Valent (talk) 19:29, 11 August 2016 (UTC)

I still have problems to understand both the transitional debt criterion and the MTO column values. From what I understand, the transitional debt criterion is just the old rule "debt percentage has to be lowered by 5% of excess debt over 60% of GDP" in the years of the transitional period, which, if followed, would automatically lead to compliance with the new debt criterion. If so, it still doesn't result in more compliant states. For example, Austria loses 1.3% debt in 2016, but they failed to do so in 2015, which also was in the transitional period. As for the MTO column values, what do they mean? The end-target is already given in the structural deficit column, so this should be whether they comply for the end-target or an adjustment path set by the commission. Instead, the column seems to contain arbitrary targets set by the national governments that don't have any meaning for EU compliance checks. So what is going on here? Ambi Valent (talk) 10:27, 12 August 2016 (UTC)

Table removed from here, since it's already on the main page. Ambi Valent (talk) 09:55, 25 August 2016 (UTC)