Author : Yu Ching Wong
Release : 2023-03-02
Genre : Business & Economics
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Fiscal Federalism in Belgium: Challenges in Restoring Fiscal Sustainability - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Fiscal Federalism in Belgium: Challenges in Restoring Fiscal Sustainability write by Yu Ching Wong. This book was released on 2023-03-02. Fiscal Federalism in Belgium: Challenges in Restoring Fiscal Sustainability available in PDF, EPUB and Kindle. Fiscal decentralization in Belgium progressed substantially in 2015-19. However, as decentralization of expenditure responsibilities continued to outpace decentralization of revenue authority, vertical fiscal gaps and greater reliance on transfers from shared resources may have reduced spending discipline. Consecutive shocks (pandemic, energy prices) have worsened the fiscal positions of all levels of government, requiring urgent and concerted effort to improve fiscal and debt sustainability. Fostering better fiscal policy coordination across all levels of government would improve the efficiency of Belgium’s decentralized fiscal framework. We recommend that fiscal adjustment at the subnational levels should be a part of the general government fiscal consolidation plan, with strict spending limits applying; integrating systematic spending reviews in the budgetary process; and adopting a more strategic, multi-annual fiscal framework to support adjustment. Implementing the 2013 Cooperation Arrangement—intended to provide fiscal rules to govern and coordinate public finances at all levels—is important. Also, the cost of overborrowing at the regional level should be fully internalized; recalibration of transfers could be considered; and some flexibility should be retained in the pace and scope of further decentralization. Finally, there is scope to improve the integration of fiscal sustainability objectives in federal and subnational structural reforms.