Transcript Programme

EUROPEAN COMMISSION
DIRECTORATE GENERAL
ECONOMIC AND FINANCIAL AFFAIRS
Fiscal policy and policy mix
Fiscal policy and surveillance
Tenth meeting of the
Network of public finance economists in public
administration
PROGRAMME OF THE MEETING
Brussels, 2 March 2016
Venue: Centre Albert Borschette, rue Froissart 36, 1040 Brussels, Room AB-1D.
9.00-9.30
9.30-9.45
REGISTRATION AND WELCOME COFFEE
INTRODUCTION TO THE MEETING
Welcoming address (Lucio Pench, European Commission)
SESSION I – THE QUALITY OF PUBLIC FINANCES: HOW TO ENSURE EFFICIENT
EXPENDITURE AND PUBLIC INVESTMENT?
9.45-12.30
Chair: Lucio Pench (European Commission)
Focusing on the quality of public finances is crucial in order to ensure efficient use of public funds in the context
of the ongoing fiscal adjustment. In this respect, the assessment of the composition and the efficiency of public
expenditure has been a topical subject of study in the recent period. What are interesting avenues for further
work, in particular for public investment? The size, composition and efficiency of public investment are very
heterogeneous between Member States and are difficult to measure. How can high efficiency and effectiveness
be ensured? Amid low levels of both public and private investment in the EU, the link between public and private
investment deserves specific attention as well. In particular, to which extent does public investment complement
or substitute to private investment activity?
'MONITORING PUBLIC WORKS IN ITALY'
 Giovanni Rizzo (Ministry of Finance, Italy)
The presentation provides an overview of the monitoring system on public works (MOP)
implemented by the Ministry of Economy and Finance (MEF). Nowadays, data about
public works are spread over several databases in Italy, hence there is a need to collect
and standardize these data in order to answer all questions relevant for both policy
making and public opinion. MOP system implemented by MEF is based on a holistic
approach that tries to connect data from the planning phase to the release of each public
work minimizing the administrative burden on monitored subjects. Detailed financial and
procedural data will be available to be matched with information from public accounts
and used for microeconomic or macroeconomic analysis.
'IMPROVING THE PRIORITISATION OF PUBLIC INVESTMENT – THE ROMANIAN EXPERIENCE'
 Attila György (Ministry of Finance, Romania)
The presentation describes the actions taken by the Romanian Government in the reform
of public investment management. It presents the actual process of prioritisation of
significant public investments and the future actions which the Ministry of Public
Finance intends to undertake for strengthening its role in the management of the public
investment projects.
11.00-11.15
COFFEE
'PUBLIC-PRIVATE PARTNERSHIPS IN THE EU – EXPERIENCES AND PRACTICES'
 Mirco Tomasi (European Commission)
The Commission has analysed Public-Private Partnerships in the context of the Third
Pillar of the Juncker Investment Plan. The Third Pillar is meant to address potential
bottlenecks to investments that exist at national level. The presentation will discuss the
macroeconomic impact of PPPs in Europe; their sectoral and geographic distribution,
their benefits as well as their risks and will conclude drawing some lessons learnt from
the experience of the Member States with PPPs. Particular emphasis will be put on the
regulatory framework and the governance aspects of PPPs, on the sectoral specificities
which facilitate or hinder the use of PPP contracts and on issues related to funding the
projects.
'EFFECTS OF PUBLIC INVESTMENT IN EUROPE: A MODEL-BASED ASSESSMENT'
 Marien Ferdinandusse (European Central Bank)
Analysis of the effect of public investment on output in Europe, against the background
of a sharp drop of public investment in a number of EU countries during the crisis and
subsequent policy discussions on the need to stimulate public investment. We start with a
brief overview of recent developments in public investment, including some
methodological issues and provide a literature overview of the effect of public investment
on growth. On the basis of updated estimates of the public capital stock we estimate the
output elasticity of public capital in VAR/VECM models. In addition, using a structural
model, we investigate sensitivity of the macroeconomic impact of an increase in
government investment to alternative assumptions about economic structures and policy
implementation.
12.45-14.00
LUNCH
14.00-16.45
SESSION II –THE FISCAL STANCE: HOW TO MEASURE AND ASSESS IT?
Chair: Gilles Mourre (European Commission)
An overarching theme in fiscal policy is how public finances impact the real economy and how this is taken into
account in fiscal policy making. From a macroeconomic perspective, this requires an analysis of the fiscal
stance. The assessment and the measurement of the fiscal stance raise methodological issues, as different
definitions and proxies are common in the literature. A related question concerns the assessment of the euro
area fiscal stance. In the current Commission practice it is computed based on an aggregation of the fiscal
stance of the individual Member States. As such, this concept is useful to provide a reference for a coordinated
discussion between ministers, but attention should be paid to caveats which shall be discussed.
'WHAT DRIVES FORECAST ERRORS AND EX-POST-REVISIONS OF STRUCTURAL BALANCES IN
THE EURO AREA?'
 Lukas Reiss (National Bank of Austria)
We analyse both ex-post-revisions and forecast errors of the level of and the change in
the structural balance in the EA-12. For this purpose, we look at the role of potential
output revisions versus other factors. Our main findings are: In general, ex-post revisions
in structural balances were mainly driven by output gap revisions, while projection errors
are to a significant extent driven by other factors. Concerning the change in the structural
balance, the mean absolute projection errors are sizeable, primarily due to other factors
than potential growth revisions. For some countries they are above the official margin of
error applied on the adjustment path to the MTO even in the autumn projections for the
current year. This large uncertainty may shed some doubt on the reliance of projections of
fiscal efforts currently used in the EU Fiscal Governance.
'ASSESSING THE FISCAL STANCE IN THE EURO AREA – THE COMMISSION METHODOLOGY'
 Eloïse Orseau (European Commission)
Following the Two Pack, the Commission has assessed the fiscal stance in the euro area
as a whole, in addition to developments in individual Member States. This presentation
gives an overview of the methodology that has been used in the Commission's 2015
Report on Public Finances in EMU. The fiscal stance, as projected in the Commission's
2015 autumn forecast, is assessed against both sustainability needs and stabilisation
needs.
15.30-16.00
COFFEE
'PROPOSAL TO IMPROVE THE FISCAL STANCE IN THE EURO AREA'
 Adrien Zakhartchouk (Ministry of Finance, France)
The presentation proposes an analysis of the macroeconomic impact of fiscal policy
decisions in the euro area and their spill-overs. It argues for a more aggregated vision of
the fiscal policy in the EA, in particular in order to improve its stabilisation role. It argues
for a better coordination of fiscal policies between Member States without questioning
the rules of the Stability and Growth Pact.
16.45-17.15 POSSIBLE TOPICS FOR FUTURE MEETINGS AND CONCLUSION