Academic Scientific JournalsLimitation of public debt on the verge of financial crisis
Keywords:
budgetary responsibility, sound public finances, fiscal rules, expenditure rule, debt ruleAbstract
The foretaste of the financial crisis raises the question of the functioning, application and enforcement of measures to ensure sound and sustainable public finances. The limitation of public debt was enshrined in law in the Czech legal system in 2017, and in April of this year one of the established fiscal rules was amended. The aim of this article is to critically analyze the adjustment of the public debt limitation that has been undertaken in the context of the current crisis caused by the spread of COVID-19. The introduction of the article will describe the European and Czech context of the limitation of public debt and setting budgetary responsibility. Subsequently, the article briefly summarizes the effects of the coronavirus crisis on the implementation of the state budget and, consequently, the justification for the legislative change of the set fiscal rule.
The methods used in the article are mainly the method of literary research relevant sources, the method of description of the limitation of the public debt regulation in European union and in passages describing the current state of budgetary responsibility rules. Method of evaluation appears in the parts of the work evaluating the legislative adjustments to budgetary responsibility rules due to the coronavirus crises.
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References
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Legal Acts
Act no. 23/2017 Coll., on Budgetary Responsibility Rules, as amended.
Council Regulation (EC) 1466/97 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (the preventive arm of the Stability and Growth Pact).
Council Regulation (EC) 1467/97 on speeding up and clarifying the implementation of the Excessive Deficit Procedure (the corrective arm of the Stability and Growth Pact).
Council Regulation (EC) 479/2009 on the application of the Protocol on the EDP.
Directive 2011/85/EU on requirements for budgetary frameworks of the Member States.
Regulation (EU) No 1173/2011 on the effective enforcement of budgetary surveillance in the euro area – sanctions regulation.
Regulation (EU) No 1174/2011 of 16 November 2011 on enforcement measures to correct excessive macroeconomic imbalances in the euro area.
Regulation (EU) No 1176/2011 of 16 November 2011 on the prevention and correction of macroeconomic imbalances.
The Treaty on the Functioning of the European Union (consolidated version – Offcial Journal C36, 26/2012).
Treaty on Stability, Coordination and Governance in Economic and Monetary Union.
Other official documents
Communication from the Commission to the Council on the activation of the General Escape Clause of the Stability and Growth Pact. Available at: https://op.europa.eu/en/publication-detail/-/publication/ed5a2bf5-6b65-11ea-b735-01aa75ed71a1/language-en, accessed: 31st August 2020.
Quarterly Report on the Management of the State Debt of the Czech Republic - 1st half of 2020. Available at: https://www.mfcr.cz/cs/verejny-sektor/rizeni-statniho-dluhu/publikace-a-prezentace/dluhove-portfolio-ctvrtletni-informace/2020/ctvrtletni-zprava-o-rizeni-statniho-dluh-39006, accessed: 31st August 2020.
The explanatory memorandum to the Act no. 23/2017 Coll., on Budgetary Responsibility Rules. Available at: https://www.psp.cz/sqw/sbirka.sqw?cz=23&r=2017, accessed: 31st August 2020.
The explanatory memorandum to the Act no. 207/2020 Coll, amending the Act no. 23/2017 Coll., on Budgetary Responsibility Rules. Available at: https://www.psp.cz/sqw/sbirka.sqw?cz=207&r=2020, accessed: 31st August 2020.
Statement of the Czech Fiscal Council concerning the government´s proposal to amend act no. 23/2017 coll. On budgetary responsibility rules. Available at: https://unrr.cz/en/statement-of-the-czech-fiscal-council-concerning-the-governments-proposal-to-amend-act-no-23-2017-coll-on-budgetary-responsibility-rules/, accessed: 31st August 2020.
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