Tobias Tesche, ‘”When one size doesn’t fit all”: The European Fiscal Board (EFB) and the rise of national fiscal councils in the European Union’ (23 May 2018)
The Stability and Growth Pact (SGP) has been plagued by chronic non-compliance and a lack of local ownership of the fiscal rules. To remedy this dysfunctional state of affairs a technocratic consensus has emerged between the European Commission, the ECB, the IMF and the OECD that fiscal councils could provide an institutional fix. Fiscal councils are supposed to disseminate impartial information about the ‘true’ state of public finances. By making fiscal policy more transparent a fiscal council enables intermediaries like the media, voters, politicians or credit rating agencies to adequately judge the competence of a government regarding its fiscal stance. Thus, fiscal councils have the capacity to orchestrate fiscal discipline with a relatively small budget and a ‘thin’ legal mandate. This indirect way of governing can be often found in areas which are considered sovereign powers.