The President of the Independent Authority for Fiscal Responsibility (AIReF), Cristina Herrero, gave a presentation today at the Faculty of Economics and Business Sciences of the Complutense University of Madrid (UCM) in which she addressed the evolution of the European fiscal coordination framework and the role played by Independent Fiscal Institutions (IFIs) in the new economic governance.
During her presentation, Cristina Herrero reviewed the main reforms of the Stability and Growth Pact (SGP) since its creation in 1997 until the most recent edition in 2024, emphasising that membership of the Economic and Monetary Union has required Member States to strengthen budgetary discipline as a condition for ensuring the stability of the euro.
The President of AIReF explained that the growing complexity of the rules and the need for technical, objective supervision led to the creation of IFIs following the 2011 reform. In her words, these institutions were conceived as essential to strengthen the credibility of public finances and ensure effective compliance with the principle of budgetary stability. In this regard, she highlighted that AIReF, created in 2013, is a unique institution in Europe due to its broad mandate over all GG sub-sectors, its single-member structure, its own financing and its safeguards of independence.
Cristina Herrero considered the 2024 reform a step forward in a change of approach that seeks to enhance the medium- and long-term perspective, national ownership, and the compatibility between sustainability and growth. It also aims to simplify practical implementation by setting a single control variable — expenditure net of revenue measures — that enables more transparent monitoring. In this new framework, the Medium-Term Fiscal-Structural Plans (MTP) drawn up by each Member State, in which they set out their commitments, are the key element.
Difficulties in implementing the new framework
However, the President warned that implementing the new framework poses technical and governance challenges. Among these, she cited the methodological complexity of determining fiscal commitments and the limited involvement of national parliaments.
Specifically, in the case of Spain, the President recalled that the Medium-Term Fiscal-Structural Plan 2025-2028 was drawn up without parliamentary debate or consultation with the Autonomous Regions (ARs) and has significant information limitations: absence of a detailed economic and fiscal scenario, lack of disaggregation by sub-sector and lack of specificity regarding the measures necessary to comply with the spending path commitment.
Evaluation is key
The President recalled that AIReF has been expanding its functions beyond fiscal supervision to include the evaluation of public policies, thereby becoming a benchmark for spending quality. She emphasised that the new orientation of the European framework promotes the principle of “better spending” and positioned evaluation as an essential tool for reallocating resources towards policies with greater economic and social impact.
Lastly, she warned that Spain faces structural sustainability challenges linked to ageing and high debt levels, and that potential growth and productivity gains will be crucial to maintaining long-term stability. In her opinion, the reform of the European fiscal framework represents an opportunity to strengthen fiscal responsibility and consolidate the institutional credibility of IFIs across the European Union.
