The European Fiscal Board maintains a statistical database on compliance with the Stability and Growth Pact criteria by all member states. Photo: Shutterstock

The European Fiscal Board maintains a statistical database on compliance with the Stability and Growth Pact criteria by all member states. Photo: Shutterstock

Over the period 1998-2021, Luxembourg was the member state with the highest level of compliance with European budgetary rules, according to a recent report.

The European Fiscal Board updated on 31 May its statistical database on compliance with the budgetary rules of the Stability and Growth Pact. Leaving aside legal interpretations and the resulting margins of appreciation, the European Fiscal Council has focused solely on the quantitative aspects in this evaluation.

Over the period from 1998 to 2021, Luxembourg has had an average budgetary compliance score of 93%. While Luxembourg has a score of 100% for both its deficit and debt, it has a score of 88% for its structural budget code and 83% for its public expenditure.

The grand duchy remains the only member state to achieve such a high score over this period of time. The second best European performer is Sweden with an average score of 92%, followed by Denmark with 83%.

Between 1998 and 2021, France had the lowest budgetary compliance score in the EU with an average score of 22%. The five countries that benefited from the European Stability Mechanism have even significantly higher scores: Ireland scores 70%, Portugal 30%, Greece 29%, Spain 39% and Cyprus 46%.

Throughout the years between 1998 and 2021, Luxembourg has maintained its number one position.

An EU member state is in compliance with European budgetary rules if the actual budget balance does not exceed -3% of GDP.

Similarly, the debt-to-GDP ratio must be below 60% of GDP.

A country is considered in compliance if its structural budget balance is equal to or greater than the medium-term objective.

Finally, countries must ensure that the annual growth rate of their public expenditure is not lower than the ten-year average of the growth rate of GDP.

The European Fiscal Board began its analysis at the end of 2016. It was set up by the European Commission as an independent advisory council on budgetary matters. Its role is to assess the implementation of EU budgetary rules, to advise the Commission on the fiscal stance of the euro area and to cooperate with member states.

This story was first published in French on . It has been translated and edited for Delano.