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government and central government sectors have a time horizon that goes beyond the yearly budgetary
cycle and are integrated into a multi-annual fiscal framework (see Figure 5). This provides an indication
that fiscal rules applied at higher levels of government pursue medium-term policy objectives while those
concerning local governments focus on short-term budgetary considerations.

Figure 5 - Time horizon of fiscal rules by sub-sector of general government

0

5

10

15

20

General Government Central Government Social Security Regional Government Local Government

General government sub-sector

Number of rules

Annual Multiannual

Source: Commission services.

Interestingly, the large majority of numerical fiscal rules applied to local and regional levels of
governments are enshrined in law or in constitution, while rules concerning central and the whole of the
general government sector tend to be more based on political agreements (internal stability pacts or other
forms of political agreement or commitment).

Figure 6 - Statutory base of fiscal rules by sub-sector of general government

0

5

10

15

20

General Government Central Government Social Security Regional Government Local Government

General government sub-sector

Number of rules

Rule enshrined in Legal Act or Constitution

Coalition agreement or Internal Pact + Political Commitment

Source: Commission services.

Likewise, enforcement mechanisms are generally stronger for those rules applied at local and regional
government levels than for rules applying to the central government (see Figure 7). A majority of rules
applying to local and regional governments sectors foresee either automatic correction mechanisms or
the obligation for the authority responsible to adopt measures in case of non-compliance with the rule. In