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Raad van State: Opinion on the 2022 Budget Memorandum and the 2021 September Report on Fiscal Monitoring

Raad van State: Opinion on the 2022 Budget Memorandum and the 2021 September Report on Fiscal Monitoring
In this report the Advisory Division of the Council of State publishes its opinion on the Budget Memorandum and the report related to independent fiscal monitoring. This year there is a strong substantive link between fiscal monitoring and the opinion on the government's financial-economic policy. The situation deviates from the regular budget cycle, because the general escape clause of the Stability and Growth Pact (SGP) was activated in relation to the Covid-19 crisis. This makes it possible for Member States to deviate from the Pact's targets. In addition, a new government is being formed and the current government is under resignation. A new government will establish new national fiscal rules.
 
Both the report related to fiscal monitoring and the opinion on the Budget Memorandum stem from the Sustainable Public Finances Act (Wet Houdbare OverheidsfinanciŽn, 'Wet HOF'). The status of the two documents differs. The opinion on the Budget Memorandum is a mandatory opinion to which the government responds in a subsequent report. The Advisory Division generally publishes two independent fiscal monitoring reports a year, in April and September In the reports it provides an assessment of the expected budgetary developments and intentions as adopted by the government in, respectively, the Stability Programme and Budget Memorandum. In its assessment the Advisory Division works closely with the CPB Netherlands Bureau for Economic Policy Analysis. The division of tasks entails that the drawing up of independent economic and budgetary forecasts and analyses are assigned to the CPB Netherlands Bureau for Economic Policy Analysis; the Advisory Division has been charged with assessing compliance with (European) fiscal rules.
 
In the interests of quality and meticulousness in drawing up the assessment for the September Report and the opinion on the Budget Memorandum the Advisory Division was able to consult a draft version of the Budget Memorandum. On the basis of this, the Advisory Division drew up a draft assessment in relation to independent fiscal monitoring (draft September Report). It has been reviewed with the government on the principle of adversarial debate. The Advisory Division has made its final assessment after being informed of the government's response. The government's response is included in full in this report. The government responds to the Advisory Division’s opinion on the Budget Memorandum in a subsequent report, which is submitted to the House of Representatives at the same time as the Advisory Division’s opinion on the Budget Memorandum.

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