Expenditure Policies Towards EU Accession

In the pre-accession economic programmes, most Central and Eastern European countries (CEECs) have put forward medium-term fiscal strategies to improve budget balances and cut back taxation levels.

It will also be necessary, however, to bring down public expenditure by an average of 2.5 percent of gross domestic product (GDP) over the period 2000-2004.

The purpose of this report is to take stock of expenditure policy reform to-date, assess the challenges ahead, and discuss the set of policies that might be most conducive to growth and convergence among the Central and Eastern European countries.

The text is organized by expenditure challenges, including: liquidating the legacy of transition by containing and financing the costs of bank and enterprise restructuring; helping economies rise to the challenges of integration by upgrading skills levels, environmental standards, and transport networks; and providing social protection to an ageing population in an affordable manner, particularly in the key areas of pensions and health. Finally the report makes recommendations for ways to curb expenditures and ways in which key expenditure programmes (such as on education, transport, and the environment) could be redirected to be more supportive.