Report on Compliance with Fiscal Responsibility and Transparency Rules (June 2013)

Report on Compliance with Fiscal Responsibility and Transparency Rules (June 2013)
This report evaluates compliance with the fiscal responsibility and budget transparency rules, enshrined in the constitutional Fiscal Responsibility Act, in the fiscal year 2012. It is submitted to the Parliament outside the standard reporting cycle, within 12 months of the election of all Council members. All subsequent reports will be published by the standard deadline, i.e. 31 August.

The Council notes that the 2012 general government gross debt reached 52.1% of GDP, which is above the first threshold defined by the constitutional Act. The finance minister was thus obliged to deliver to the Parliament his written substantiation of the debt amount, along with the measures proposed to reduce the debt.

The Council is of the view that the adoption of effectively functioning expenditure ceilings (including correction mechanisms) represents an important step towards meeting the medium-term budget objectives. The legislative framework for the calculation of expenditure ceilings has not yet been introduced.

The Council views positively the progress achieved in the publication of information compared with the years before. Given the fact that the Act has been in force for one year only, there is understandably further room for improvement in terms of the quality of information provided. Both in the budget and in the Summary Annual Report, the information on general government’s consolidated balance should be presented in a more detailed structure, one-off impacts should be presented in a better arranged manner, and information on the fiscal performance of corporations with capital participation of the state and the National Property Fund should improve. Nevertheless, the failure to publish the June Tax Revenue Forecast by the deadline set in Article 9(3) of the Act must be viewed negatively.
 
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