2025 annual report of the European Fiscal Board

On 22 October 2025, the European Fiscal Board (EFB) published its ninth annual report. The new Board, which started its work in April this year, provides an independent assessment of the fiscal policy conducted in 2024 during a pivotal transition of the EU fiscal framework. It also assesses key policy documents and decisions, such as the first round of medium-term fiscal-structural plans, shaping fiscal policy making in the years to come. 

Pieter Hasekamp, Chair of the European Fiscal Board: “The new rules amount to a fundamental revision of EU fiscal governance. Its implementation took place under a very compressed calendar, with limited transparency, and some key elements are still under discussion. It is important to draw lessons from this and make the future process less opaque to all stakeholders.”

In 2024, the EU economy experienced an uptick in real GDP growth, strongly supported by public spending, while energy prices stabilised, and unemployment reached historic lows. Despite favourable macroeconomic conditions, the improvement in budget balances fell short of forecasts. Governments chose to channel revenue windfalls and the phasing out of energy support measures into expanding current discretionary spending rather than pursuing further fiscal consolidation. This development unfolded against the backdrop of a transition to the new economic governance framework, with attention shifting towards its roll-out, thereby creating a fiscal surveillance gap. 

The EFB highlights the lessons learned and concerns arising from this transition period. The rapid implementation of the reform resulted in delayed submissions of national plans and left implementation details open. The EFB notes new types of discretion applied in the excessive deficit procedure and the limited formal role of Independent Fiscal Institutions. Preparation of the medium-term plans involved a series of bilateral interactions between national governments and the Commission. The way this process is conducted could undermine the multilateral nature of EU fiscal governance and weigh on the transparency and predictability of the revised framework.  To ensure the effective and credible implementation as well as the genuine improvements brought by the reformed fiscal rules, the EFB calls on addressing these issues.