European Commission aims to reform economic governance: Analysis by the European Court of Auditors reveals risks.

European Commission aims to reform economic governance: Analysis by the European Court of Auditors reveals risks.

According to a report by www.presseportal.de, an analysis by the European Court of Auditors shows that the EU's economic governance reform proposals address most concerns about the current legal framework. Nevertheless, risks and challenges remain. The main challenge will be to ensure fiscal adjustments that promote debt sustainability while supporting investment and growth.

The planned reform is intended to address many of the problems with the current framework, which have been repeatedly raised by the European Court of Auditors in recent years. One of the proposed changes relates to net expenditure, which will serve as the only indicator to define fiscal adjustment paths. Auditors welcome this goal but warn that EU countries may not make the necessary adjustments. This could be particularly the case if countries use more optimistic growth assumptions than the Commission, leading to insufficient adjustment.

Furthermore, it is emphasized that national ownership is crucial for effective economic governance of the EU. The improvements in transparency and the strengthening of independent national fiscal institutions are also seen as positive.

With regard to the enforcement of fiscal rules, linking funds from the Recovery and Resilience Facility to the country-specific recommendations of the European Semester could have a positive impact and promote the implementation of the recommendations. Nevertheless, many actors remain involved in the EU's macroeconomic surveillance at many levels.

Overall, the analysis shows that the reform proposals address important aspects of the EU's economic governance, but also bring with them potential risks and challenges. Effective implementation and compliance with these reforms will be crucial to promote EU stability and debt sustainability.

It is important that the EU carefully considers the results of this analysis and ensures that reforms are implemented effectively to achieve the objectives of stable and sustainable economic governance.