The IMF wants to reform Europe»s budgetary sphere

According to the three directors of the IMF, conditions in Europe have never been so favorable for a major fiscal policy reform.

High debt and rising interest rates are the main incentives for this reform. This is the perfect time to rethink fiscal rules to ensure the new budget policies are bold and flexible when needed. The fact is, the state loses its ability to support financial institutions with each new crisis. And now, when European population also needs support due to the recent energy shocks, the situation is developing quite dangerously for the region.

The document published by the IMF contains three recommendations:

• To create a European Tax Council. The new body will be responsible for the overall budget while maintaining the following principles — 3% deficit, 60% debt.
• To require participating countries to comply with the updated rules. There will be independent tax councils at the national level. They will have to strengthen the checks and balances system.
• To entrust the European Commission with an oversight function and monitor the implementation of the tasks set.