SPB Newsfeed: Building Fiscal Institutions to Meet Post-Crisis Challenges Seminar
The CEF hosted a high-level seminar to examine the role of strong fiscal institutions in improving the quality of fiscal management and helping to ensure fiscal sustainability.This kick-off event of the Strategic Planning and Budgeting (SPB) project responded to the needs of South East European countries to strengthen their fiscal institutions in light of weaknesses identified in the recent volatile global economic conditions. It was delivered in close cooperation with top international experts, including from the International Monetary Fund’s Fiscal Affairs Department.
The seminar has been designed for senior level officials from fiscal agencies who actively deal with fiscal policy design, implementation and oversight. The objective of the course has been to help officials to better understand the role that strong fiscal institutions can play in ensuring long-term fiscal sustainability and to provide reform options.
Through presentations, case studies on advanced and emerging market experiences, and workshops, the seminar discussed the building blocks and options for putting in place a comprehensive institutional framework. It drew on international experiences and recent developments, including new requirements under the EU fiscal governance framework. In particular, the seminar reviewed good practices for a sound budget process (e.g. fiscal forecasting, budget execution and treasury management, and reporting). These elements, combined with sound management and reporting on fiscal risks, are key for implementing a medium-term orientation of fiscal policy as part of a medium-term budget framework (MTBF).
The seminar discussed in detail the elements and process to operate fiscal policy within a MTBF and the linkages to fiscal rules, and reviewed different types of fiscal rules and their properties, and discussed options for specific design features (e.g. choice of the target variable, escape clauses, automatic correction mechanism, coordination with sub-national governments). It also addressed challenges connected to adopting structural budget balance rules, as agreed, for example, under the EU’s Fiscal Compact. And finally, the seminar explored the possible role of fiscal councils in strengthening fiscal performance by raising public awareness and accountability.
The seminar has been delivered as part of the CEF's SPB project, which is financed by the European Union and has the objective to help strengthening beneficiary countries’ capacity to design and implement medium-term macrofiscal policy.
