Verifying compliance with the requirements of Article 11 of Fiscal Discipline Law  6 December 2017

The Council assesses whether adjustment to the general government structural balance, shall be made according to Article 11 of the Fiscal discipline law (FDL) through triggering the automatic correction mechanism to make adjustments and the future periods to which the correction applies.

The Council confirms that, in accordance with Article 11 of the FDL, no adjustment to the structural balance is necessary. The structural balance rule and the expenditure growth rule calculations for 2013-2016 indicate that a positive deviation buffer has been accumulated. However, the considerable impact of the cyclical component on the assessment of the structural balance and the impact of the GDP deflator's estimates on the calculation of the expenditure growth rule suggests the need for conservative fiscal policy.

The Council notes that, based on the expenditure growth rule, the positive execution results in 2016 have improved the balance of accrued deviations.

The Council contends that, to further improve the FDL framework, it would be useful to include all the fiscal numerical rules outlined in the FDL in the correction mechanism assessment, including the expenditure growth rule.

Opinion available here.