Jul 2, 2019

Kicking off the Economic Reform Programme 2020-2022 Process

In cooperation with the European Commission Directorate-General for Neighbourhood and Enlargement Negotiations (DG NEAR) we organized regional meeting of the Economic Reform Programmes (ERP) coordinators in Brussels. We are also successfully concluding a series of in-country workshops on Methodology and Challenges in Costing of Structural Reforms in the ERP. At workshops held in seven countries throughout May-July we discussed possible ways for improving the quality of costing of structural reforms outlined in the ERP as a way towards securing their coordinated, fiscally-sustainable and timely implementation. Workshops are part of the project Fiscal Implications of Structural Reforms (FISR) funded by the European Union.

The Regional Meeting of the ERP Coordinators in Brussels kicked off the ERP 2020-2022 process by presenting the new Guidance for the preparation of the ERPs, giving more hands-on guidance on challenging aspects and planning ERP preparation and support in country-specific sessions.Over the recent years, the definition and prioritization of structural reforms from ERPs has improved while their costing has not seen the same level of progress. The clear methodological guidance on costing of structural reforms, or more broadly on measuring their fiscal implications, was insufficient. Under these circumstances, variety of challenges in proper costing and budgeting of individual structural reforms are being faced. To support overcoming these challenges CEF experts designed a Methodological Guidance for Costing of Structural Reforms. The in-country workshops in large part focused on presentation of the costing methodology in order to provide a consistent and user-friendly framework for costing of structural reforms that would contribute to improvement of the overall quality of the ERP chapter covering structural reforms (Chapter 4). We also focused on hearing the experiences of line ministries and how they are coping with these challenges.

The ERP preparation requires strong commitment and clear guidance at the government level on prioritization and implementation of structural reforms, as well as their design, costing and financing over a medium-term. Based on the needs assessment in beneficiary countries it turned out that the main challenges that have to be addressed are related directly to implementation of costing guidance are the following:

  • Understanding of „additional costs“ and „base year“ concepts
  • Drawing the line between direct and indirect costs
  • Realistic planning of funding sources and their availability
  • Minimizing the use of „to be determined“ in the financing table – it inflates the costs and delays implementation
  • Involving both „content“ and „financial“ officials in developing of measures and their costing and budgeting
  • Cooperation and information exchange between line ministries, structural reform coordinator and ministry of finance budget department

The workshops focused on explaining the elements of Methodological Guidance for Costing of Structural Reforms under the ERPs and provided practical examples on how it can be used for strengthening the existing processes and tools for costing of structural reforms as well as for their financing.

Find out more about the Regional meeting of the ERP coordinators and individual in-country events in the digital stories.

About Fiscal Implications of Structural Reforms” project.