All Nordic countries have generous tax-financed welfare systems. Demographic changes and population ageing in particular, but also short-sighted policy making, political competition and incomplete information may contribute to a deficit bias in those systems in the future – a situation where budget deficits and public debt increase.
All Nordic countries, as well as the European Union, have adopted fiscal frameworks that shall guarantee long-term budget discipline, while allowing for flexible solutions in the short term. This project analyses the long-term sustainability of public finances in the Nordic countries and the different fiscal frameworks.
The project aims to:
– provide an overview of existing studies on financial sustainability in the Nordic countries and analyse similarities and differences, weaknesses and strengths of different methods.
– identify the challenges that Nordic countries are facing
– provide a comparison of fiscal legal frameworks and relevant institutions in the Nordic countries and the role of the fiscal rules adopted by the EU
The project will run throughout 2019 and its final product will be a report that will discuss the findings of the analysis on the sustainability of the Nordic public finances.