THE QUALITY OF PUBLIC FINANCES
Findings of the Economic Policy Committee-Working Group (2004-2007)Edited by:Servaas Deroose(Director, Directorate Macro economy of the euro area and the EU,
Directorate-General Economic and Financial Affairs)Dr. Christian Kastrop(President of the Economic Policy Committee of the EU.
Chairman of the EPC-Working Group "Quality of Public Finances" (2004-2008).
Deputy Director General "Public Finance and Economic Affairs", Federal Ministry of Finance,
Germany)March 2008Abstract:
Improving the quality of public finances has become a key policy challenge for European policy
makers. While maintaining sound budget positions remains the linchpin of the European Union's fiscal
framework, rising pressures from globalisation and ageing populations are calling to improve also the
qualitative aspects of fiscal policy with a view to supporting economic growth. This includes to better
target public resources, raise the efficiency of public spending, modernise public finance institutions
and budget administration, create supportive fiscal frameworks and establish efficient and growth-
enhancing revenue systems. The need for such a comprehensive approach to strengthen public
finances is laid out in this collection of papers prepared by the EPC Working Group on the Quality of
Public Finances between 2004 and 2007. It also highlights the challenges that come along with policy
implementation by drawing on a number of country case studies.
Key words: Public finances, fiscal policy, public spending, expenditure composition, fiscal
governance, fiscal rules, public administration, expenditure efficiency, health expenditure, innovation
policy, revenue systems, taxation, COFOG
JEL classification: E01, E62, H11, H20, H30, H50, H51, H61, H