Chapter 5: The Economic Governance of the Union and the Quality of Public Finances: Key Issues for Policy-Making
5. The economic governance of the Union and the quality of public ﬁnances: key issues for policymaking Maria João Rodrigues 5.1 IMPROVING EU ECONOMIC GOVERNANCE EU economic governance faces several overlapping challenges in order to relaunch growth: globalization, fostering structural reforms, strengthening the eurozone, and supporting internal convergence. The EU can take steps to improve economic governance by developing the links between recently updated key instruments, namely: the renewed Lisbon Strategy and the integrated guidelines for growth and jobs; the revised Stability and Growth Pact (SGP); the guidelines for cohesion policy and the next generation of structural funds. For Member States, this means developing the links between the national reform programmes (NRP), the stability and convergence programmes (SCP) and the national strategic reference frameworks (NSRF). The main links that must be developed are the following: structural reforms to ensure ﬁscal consolidation and sustainability; structural reforms to strengthen long-term growth potential and boost the growth rate, which will make it easier to improve ﬁscal consolidation and sustainability; macroeconomic policies supporting structural reforms and strengthening long-term growth potential, within a framework of ﬁscal consolidation; structural funds complementing macroeconomic policies to support structural reforms and growth potential. The key issue, then, is how to exploit fully synergies by improving the consistency and mutual re-enforcement of these instruments. There are also diﬃculties and trade-oﬀs, notably because some structural reforms can involve additional expense, at least in the short term, and also because spending of structural funds can be hindered by insu...
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