IMF FAD Director Cottarelli Presented Fiscal Monitor Update at the CEF
The IMF Fiscal Affairs Department (FAD) Director Carlo Cottarelli presented today the Fiscal Monitor Update at the Center of Excellence in Finance (CEF) in Ljubljana, Slovenia. In his presentation Cottarelli discussed key lessons for South East Europe (SEE) arising from the current global fiscal crisis. He stressed that fiscal institutions needed to be further strengthened to ensure long-term fiscal credibility while Europe needed adjustment in fiscal fundamentals and reforms to boost potential growth.
This was the IMF FAD Director's first visit to the CEF, an evidence of good and successful collaboration between the IMF FAD and CEF through the years. The CEF is a host to two IMF's regional technical assistance advisors in public financial management and tax administration.
During his presentation Cottarelli stressed that deficits in many advanced economies fell significantly during 2011, and most plan substantial adjustment this year. In the IMF's opinion, continued adjustment is necessary for medium-term debt sustainability, but should ideally occur at a pace that supports adequate growth in output and employment.
Cottarelli also explained that further substantial consolidation is in the pipeline as many advanced economies have introduced new measures to support the achievement of their deficit targets. Properly defined fiscal rules are very important but it is equally important to understand that fiscal rules are not the only way of managing fiscal policy. In the IMF's opinion, countries should watch the speed of short-term adjustment, while medium-term consolidation remains a priority. In emerging economies, fiscal policy should reflect the different conditions and risks they face.
About the Fiscal Affairs Department of the IMF
Since 1964, the Fiscal Affairs Department (FAD) of the International Monetary Fund has been a leading source of fiscal policy and management expertise worldwide. FAD monitors and analyzes global fiscal trends; advises IMF member countries on fiscal issues directly or in close cooperation with the IMF area departments and contributes to the design and implementation of IMF-supported programs. FAD's analysis and research is at the forefront of fiscal policy debates. Its recent work has contributed to the discussion on fiscal policy options to address fiscal challenges in the aftermath of the global financial crisis. Each year, FAD staff and experts provide advisory services to about 130 IMF member countries covering advanced, emerging and low income economies.
About the Center of Excellence in Finance
The Center of Excellence in Finance (CEF) was established in January 2001 by the Slovenian Government on the initiative of the Slovenian Ministry of Finance and in close cooperation with ministries of finance of other countries in South East Europe. The initiative to establish the CEF was framed in the context of the Stability Pact for South East Europe. The CEF recognizes the urgent need of capacity development in public financial management and central banking in the countries of the region to cope with the challenges of implementing much needed reforms.
