Fiscal Rule Stretching in the European Union: The Impact of Elections, Financial Stress, and Excessive Deficit Procedures on Government Debt Revisions
This paper examines the strategic manipulationof government debt data—referred to as ”fiscal rule stretch-ing”—among European Union member states, particularly inresponse to electoral incentives, financial market stress, and theconstraints of the Stability and Growth Pact (SGP). Using Euro-stat revisions of government debt figures, we find that countrieswith higher debt levels, particularly those exceeding the 60% ofGDP SGP threshold, are more likely to have their debt figuresrevised upwards. Our analysis further reveals that eurozonemembers are more inclined to engage in […]