FISCAL RULE EFFICIENCY IN EU MEMBER STATES

The implementation of fiscal rules has been the central point of economic debates in the European Union institutions and Member States. They indicate the direction in which policymakers aim to improve public finances in the aftermath of the global financial crisis. The aim of this paper is to analyse the efficiency of the fiscal rule index and fiscal rule strength index in the European Union Member States, with special emphasis on Croatia. The methodology and data of the European Commission's DG ECFIN were used to analyse the efficiency of the fiscal rule index and fiscal rule strength index by type and government sectors in the European Union Member States during the 2007-2014 period. Our analysis shows that trends in the values of the fiscal rule strength index and standardized fiscal rule index indicate that fiscal rules are becoming more important and efficient as policy tools compared to the precrisis period, and that the situation in Croatia has been continuously improving since its accession to the EU in mid-2013.