101 Proposals to reform the Stability and Growth Pact. Why so many? A Survey

The overview of the 101 SGP proposals, displayed in Table 2, shows the distribution across
the characterising variables. As expected, the number of recommended therapies increased -
almost exponentially - as the SGP crisis matured. Most of them were advanced in the two
years immediately before and after the 2003 Council decision effectively put the Pact in
abeyance, reflecting the topical and politically pressing nature of the issue. The geographical
distribution is very EU-centred: around 80 per cent of the proposals originated from European
economists, of which less than one fourth were from non-euro-area countries. More than half
of the proposals were produced by academics. Nevertheless, the fact that around one fourth of
the proposals were advanced by non-academics brings out the political prominence of the
SGP.

The overview in Table 2 also reveals the absence of a clear majority position on one key
element of the EU fiscal framework. The 101 proposals are widely spread across the variable
capturing the main aim of the SGP as identified by the author of the proposal.

Concerning the concrete measures on how to reform the SGP, about half of the proposals
argue that changes in rules and procedures within the existing framework are sufficient to
improve budgetary surveillance. This essentially matches the actual outcome of the SGP
reform debate as embodied in the Council report of 20 March 2005. However, a significant
number of the proposals advocate a more radical break, including changes to the institutional
setup or entirely new institutions. On the other hand, a small number of economists are of the
opinion that the SGP needs no change.¹⁴

An examination of the underpinnings of the reform proposals reveals first of all that the vast
majority of them do not provide an explicit theoretical basis and, second, that only about half
of the authors conduct empirical analysis to corroborate their views. This picture could be an
indication of the strong political dimension of the debate. An alternative and equally plausible
reading is that a great many authors build their analysis or proposal on the existing evidence
which they regard as commonly known and accepted.

The time dimension is an important aspect. As shown in Table 2, the reform debate attracted
an increasing number of economists as November 2003 drew closer and kept its sustained
momentum in the seventeen months period up to April 2005. Around one third of the

¹⁴ Clearly, this distribution may not be genuinely representative for the entire population. We cannot rule a out a
selection bias in the sense that economists who see no need to change the SGP may have been less inclined to
participate in the discussion than others.

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