The first Banca d’Italia workshop on public finances aimed at providing a comprehensive overview of the debate concerning the development and the use of structural indicators for the budget balances.
The new EMU framework enhances the importance of structural budget balances, which assess the budgetary position net of the cyclical component and provide an indication of the available room for manoeuvre. Structural balance estimates are essential for the effectiveness of the multilateral surveillance mechanism introduced by the Maastricht Treaty and completed by the Stability and Growth Pact. Past experience indicates that policy-makers often let the structural deficit increase in periods of relatively high economic growth. In other words, part of the improvement of budgetary balances stemming from the cycle was used to carry out expansionary discretionary policies. Thus the success of monetary union appears to require substantial changes in the policies implemented in good times. This requires, inter alia, also instruments allowing an accurate monitoring of budgetary situations.
The papers presented by experts from the European System of Central Banks, the European Commission, IMF and OECD have been collected in the present volume. The workshop allowed ESCB and international organisation experts to review the main methodological issues, to discuss the advantages and disadvantages of alternative indicators, to highlight the problems and the possible solutions.
Attendance at the conference is by invitation only.
Organizer: Mr. Daniele Franco, Banca d’Italia
