The EU Fiscal Compact to Get out of Crisis Discussed at TEPAV Angelo Santagostino, PhD, of the University of Brescia drew attention to the rise in public debt across EU formerly controlled via the Maastricht criteria.

ANKARA – The European Union (EU) fiscal compact which became a global agenda item amid the crisis was addressed with a meeting held at TEPAV.

The keynote speaker of the meeting held on Monday, 9 April 2012 was Angelo Santagostino, Jean Monnet chair of Economics of European Integration at the University of Brescia, Italy. During the meeting moderated by TEPAV EU Institute Director Nilgün Arısan Eralp, Santagostino assessed the fiscal tightening measures the EU launched to get out of the crisis, the progress so far and steps to be taken.

Public debt remedied by Maastricht criteria worsens …

Santagostino drew attention to the rise in unemployment and public debt combined with the fall in the GDP growth across EU countries. Stressing that EU’s GDP grew strongly early in 2011 but slowed substantially since then, he emphasized that GDP figures were still below the level in 2007. Pointing at the rise in public deficit, he said that from 1999 to 2007, the Maastricht criteria have kept budget deficit at very low levels close to zero and government debt as a ratio to GDP below 60 percent. The ratio of public debt to GDP by 2013, however, was expected to go beyond 60 percent, reaching as high as 80-87 percent in Germany and France.

He recommended a policy mixture that focuses on macroeconomic stability, promotes competition, free trade and higher economic independence and prefers private sector driven development to state-intervention.

The meeting ended after questions and comments from the audience.