SOME RECENT DEVELOPMENTS REGARDING THE EUROPEAN UNION FISCAL POSITION

During the last decade, fiscal policies in the euro area and structural reforms in the European Union’s countries that experienced different fiscal problems were a priority for the EU decisionmakers. The existence of sound and sustainable public finances in the EU and, in particular, in the euro area is based, on the one hand, on macroeconomic stability, and on the other hand, on balanced and sustainable economic growth. This paper focuses on capturing the recent developments in public finances, more precisely some indicators essential for assessing the health of the EU economy and of its Member States. The results of our research show an improvement of them, as a whole, as an effect of structural reforms, investments and also of responsible fiscal-budgetary policies.


Introduction
In the context of excessive macroeconomic imbalances and financial tensions in the EU, its Member States experience various situations regarding general government gross debt and general government deficit/surplus, as a percentage of gross domestic product (GDP). In order to analyze their trends, we used Eurostat data, from 2015 to 2018. The obtained results allow us to appreciate that during the analyzed period, the European Union has made progress in correcting macroeconomic imbalances, while some aspects of vulnerability still exist.

Some regulatory aspects
The European Union public finance, overall, face major challenges arising from the need to reduce the level of indebtedness, of the pressure on long-term expenditures and of fiscal burden which is quite high (Bucur, Dragomirescu, 2013). According to the Treaty on the Functioning of the European Union, the basic rule of budgetary policy is that "Member States shall avoid excessive government deficits" and prove sound public finances by complying with the reference values of 3% and, respectively, of 60% of the GDP for budget deficit and public debt.
In the light of the Treaty, "at least once every two years, or at the request of a Member State with a derogation, the Commission and the European Central Bank shall report to the Council on the progress made by the Member States with a derogation in fulfiling their obligations regarding the achievement of economic and monetary union" (Article 140(1)). These reports examine, among others, fiscal developments, more precisely the extent to which each Member State met the criteria of "the sustainability of the government financial position" as an achievement of "a government budgetary position without a deficit that is excessive as determined in accordance with Article 126(6)" (Treaty on the Functioning of the European Union). Governed by Article 126 of the Treaty, the excessive deficits procedure (EDP) mentions that if a Member State does not fulfil the requirements regarding fiscal discipline, the European Commission shall prepare a report when the ratio between the public deficit and the GDP exceeds the reference value, unless the ratio has decreased significantly and steadily and reaches a level close to the reference value, or if its exceedance is exceptional and temporary and the ratio remains close to the reference value, or when the ratio between public debt and GDP exceeds the reference value, unless this ratio is sufficiently diminished and approaches the reference value at a satisfactory rate.
It is also worth noting that in 2018, both EU-28 and EA-19 registered a general government balance below the reference of -3% of GDP, reaching the level of -0.6% of GDP and respectively -0.5% of GDP. During the period of our analysis, due to favorable cyclical conditions and lower interest rates, the overall government deficit in the EU showed a downward trend, but this "is expected to end in 2019, when the overall deficit is projected to slightly increase for the first time since 2009" (European Commission, 2019). At the end of 2018, half of the EU Member States reported a government debt above the level of 60% of GDP, the highest of them being recorded in Greece (181.1%), followed by Italy (132, 2%), Portugal (121.5%), Belgium (102.0%), France (98.4%) and Spain (97.1%). The lowest government debt-to-GDP ratio were registered in Estonia (8.4%), followed by Luxembourg (21.4%) and Bulgaria (22.6%). Also, in 2018, the government debt-to-GDP ratio in EU-28 and in EA-19 reached the level of 80.0% and 85.1% respectively. The Commission estimates that in some EU Member States, general government gross debt will remain close to historical peak values, the expected budgetary adjustment being relatively limited or even negative.

Conclusions
In the context of macroeconomic imbalances, financial tensions and long-term challenges on the sustainability of the European Union's public finances, this paper aims to analyze the developments of the main indicators, the general government deficit/surplus and the general government gross debt (in relation to GDP), using the statistical data available on Eurostat, from 2015 to 2018. The results allow us to appreciate that during the analyzed period, the European Union has made progress in correcting the macroeconomic imbalances, while some aspects of vulnerability still exist, and the evolution of the general government balance and the general government gross debt, as a whole, were favorable both for EU-28 as well as for EA-19.
In conclusion, the EU's public finances have improved, the public debt, although over the reference threshold of 60%, has traveled a downward trend from 2015 until 2018, while the government deficit was below 1% of GDP in 2018. As a result and as recommended by the Commission, the implementation of structural reforms in the EU countries, the investment and also the responsible fiscal-budgetary policies, combined with decisive actions at European level, including the Investment Plan for Europe, can further contribute to renewing stability and increasing the prosperity of the European economy.