Analytics, Banks, EU – Baltic States, Financial Services, Modern EU

New European Fiscal Board (EFB) will both advise the Commission on fiscal matters and evaluate the implementation of EU fiscal rules while cooperating with the EU member states’ national fiscal councils. The EFB consists of five members and supported by a Secretariat; the members are experts on fiscal policy, public finances and macroeconomics, with experience in European economic governance and the EU's fiscal rules.

The EFB was set up to highlight the importance for EU states to implement responsible fiscal policies, which reconcile the imperative of sustainable public finances with the need for economic stabilisation (the latter is particularly important for the euro area). The Board will provide to the Commission an evaluation of the implementation of the EU fiscal rules, including the appropriateness of the actual fiscal stance at euro area and national level.

Selecting the members

There are the following members of the Board: Niels Thygesen (Chair, Denmark), Roel Beetsma (The Netherlands), Massimo Bordignon (Italy), Sandrine Duchêne (France) and Mateusz Szczurek (Poland).  

The selection process for Board members has been conducted in full transparency, with an open call for expression of interest. It was open for several weeks and numerous excellent candidates from across the EU applied. A selection panel composed of high-level officials from the Commission and the Council of Ministers, conducted interviews and shortlisted candidates to serve as Chair and Board Members.

The Chair and one Member have been appointed by the Commission upon proposal of the President, after having consulted the Vice-President for the Euro and Social Dialogue, also responsible for Financial Stability, Financial Services and Capital Markets Union, and the Commissioner for Economic and Financial Affairs, Taxation and Customs. The European Central Bank, the Eurogroup Working Group and the national fiscal councils were consulted on the remaining three members.

The criteria for assessing applications included:

·         Proven and relevant competence and experience of the applicants demonstrating that they are respected international experts as regards macroeconomics, public finances, fiscal policy and budgetary management;

·         Deep understanding of the EU fiscal rules and its role for the functioning of the EU and EMU;

·         Proven and relevant competence and experience with economic policy making; preferably gained from work in policy-making institutions, policy-advising institutions or academia;

·         Knowledge of the EU institutions and EU decision making processes and the role of the European Commission.

·         Experience in carrying out economic analysis from a horizontal, cross-country perspective would be an asset.

The selection panel also aimed to strike a balance in terms of the representativeness of applicants, gender and geographical origin, taking into account the specific tasks of the European Fiscal Board and the type of expertise required.

Independent body for the Commission

The Members of the Board will be required to act independently and will neither seek, nor take instructions from, any EU or national institution, bodies or governments, including the European Commission. They are obliged to disclose any potential conflict of interest. The impartiality of the Board's advice is safeguarded by its balanced composition which presents a diversity of experiences, backgrounds and views.

The new advisory European Fiscal Board will be functionally independent too: the members are not employees of the Commission and are committed to providing independent expertise. While practical administrative reasons make it necessary to attach the Secretariat of the Board to the Commission, for instance to access similar data, the Board has been carefully designed as a fully autonomous body.

The Board's mandate and set-up were set out transparently in the Commission's Decision of 21 October 2015. Its mandate and independence therefore have a clear legal basis, in line with best practices for independent bodies. The Commission Decision includes strong independence safeguards inspired by the experience of setting up the national fiscal councils.

The Board determines its own working methods by adopting its own rules of procedure and freely organises its activities. As set out in the College decision from 21 October 2015, the secretariat is administratively attached to the Commission's Secretariat-General.

The Board’s decisions

It clearly states in the Five Presidents' Report that the Board: "should advise, not implement policy. Enforcing the rules should remain the task of the European Commission."

The Commission's mandate is based in the EU Treaty, where each institution's roles in economic and monetary policymaking are clearly outlined. A 'fully independent expert body' cannot take fiscal decisions because this would infringe on the prerogatives of the various EU institutions, including accountability and decision-making procedures set out in the Treaty.

In this respect, it is important not to mix up the role of the Board set up at EU level to advise the Commission with that of the national fiscal councils set up at national level. Those councils perform specific tasks linked to national budgetary processes, which do not exist at EU level.

In line with the Commission decision establishing the Board, the Board will publish an annual report of its activities, which will include summaries of its advice and evaluations rendered to the Commission (art. 6).

A Memorandum of Understanding will be signed between the Board and relevant Commission services. This Memorandum will address budgetary and human resources, as well as access to data and information which are necessary for the Board to carry out its tasks. A secretariat will provide the Board with technical and practical support.

The relationship between the Board and national fiscal councils

All EU member states are required to have national fiscal councils under the "two-pack" regulations. National fiscal councils are independent bodies, which monitor compliance with national fiscal rules in the EU states.

The Board will not interfere with the work of national fiscal councils, but will cooperate with them, particularly in the exchange of best practices and facilitating common understanding on matters related to EU fiscal rules. Such cooperation will benefit and strengthen both the Board and national fiscal councils.

Reference: European Commission, Fact sheet memo, Brussels, 19 October 2016 in:

http://europa.eu/rapid/press-release_MEMO-16-3481_en.htm?locale=en