16th Annual Meeting of the OECD Working Party for Independent Fiscal Institu-tions and Parliamentary Budget Officials

The Hellenic Parliament and the Parliamentary Budget Office (HPBO) hosted the 16th Annual Meeting of the OECD Working Party for Independent Fiscal Institutions and Parliamentary Budget Officials in Athens on June 17 and 18. The opening of the proceedings was announced by the President of the Hellenic Parliament, Mr. Konstantinos Tasoulas, while keynote speakers were the Minister of National Economy and Finance Mr. Kostis Hatzidakis and the Minister of Education, Religion Affairs and Sports Mr. Kyriakos Pierrakakis. Speakers were also the chairman of the Standing Committee on Economic Affairs, Mr. Apostolos Vesyropoulos and the 4th Vice-President of the Parliament, Ms. Olga Gerovasili. The Secretary General of the Parliament, Mr. Vasileios Bagiokos, also attended the proceedings.

The Coordinator of the HPBO Professor Mr. John Tsoukalas stated: "With great joy and special honour the Office, with the fervent support of the President of the Parliament, organized, for the first time in Greece, at the Hellenic Parliament, the 16th annual meeting of the independent fiscal institutions of the OECD countries with 37 country delegations. In a warm spirit of cooperation, the meeting highlighted the value of long-term planning for the benefit of citizens. In an environment of successive crises, our Offices are called upon to contribute to the design of a new policy philosophy that will balance between prudent fiscal management and the systematic financing of those policies that will build economies and societies that will be more resilient to future turbulence."

The work of the Annual Meeting was attended by 120 representatives from 37 countries, while from Greece, in addition to the organizer HPBO, the Hellenic Fiscal Council participated.

The first section of the Annual Meeting examined how Independent Financial Institutions can move from simply monitoring public finances and states' compliance with fiscal rules to actually supporting long-term fiscal sustainability. Specifically, in this section the characteristics that the Independent Financial Institutions need to develop for this purpose were presented. These features are:

(i) independence (as regards their administration, operation and resources);

(ii) development of appropriate analytical tools (such as analyses of the macro-term sustainability of the economy, estimates of the cost of government or legislative proposals, macroeconomic and fiscal forecasts, well-trained workforce, etc.)

(iii) better communication (dissemination and promotion) of the work of the Independent Financial Institutions.

(iv) evaluation of communication results (media and internet coverage).

Using the above four criteria, the OECD created a new "Fiscal Advocate Index" to assess the main Independent Financial Institutions of OECD countries as "advocates" of long-term fiscal sustainability. As for Greece, the study presented showed that the two Greek independent fiscal institutions (the Parliamentary Budget Office and the Fiscal Council) perform well in terms of the criteria of their independence and analytical capacity, but lag behind in communication outcomes compared to other European countries.

In the second section, the importance of citizens' participation in the process of discussing and considering the budget in the relevant parliamentary committees was discussed, as well as the use of innovative practices aimed at strengthening the involvement of citizens in issues related to the budget and understanding of budgetary constraints and the necessary compromises in the distribution of costs. Also, the dialogue with citizens contributes to pluralism, the participation of citizens in decision-making and the strengthening of parliamentary oversight.

In this context, Mr. Vesyropoulos, chairman of the Standing Committee of Economic Affairs, presented the reforms that have been carried out in recent years in Greece in the entire economy and in particular in the monitoring of the fiscal figures by the citizens, in the strengthening of the independence of institutions related to the monitoring of fiscal figures and the citizen participation in budget oversight process. It was also underlined that the extroversion and participation of citizens are priorities, while the adoption of modern technologies is expected to further strengthen transparency.

At the same time, examples of citizen participation in the budget preparation and execution process in the Parliaments of Scotland and the Netherlands were presented. In particular, the Parliament of Scotland has implemented methods based on the approach of deliberative democracy with the aim of strengthening the role of citizens in decision-making, while the Parliament of the Netherlands has developed the "V-100" practice which takes over the selection of one hundred citizens with the aim of conducting an audit of public finances, asking questions to the competent bodies and publicly discussing fiscal matters.

In the third section, the role of Independent Financial Institutions in understanding the fiscal consequences of climate change and the "green transition" was examined. It was pointed out that the quantification of fiscal consequences is a particularly difficult exercise as it is surrounded by uncertainties and complex consequences on economic activity. In the same section, a specialized analysis tool called Edison, which has been developed by the OECD to calculate the fiscal effects of climate change, was presented. It is designed, as a simple first step, to help economists better understand the fiscal impacts of climate change.

Both climate change and the green transition are likely to put pressure on public finances. The fiscal impacts of climate change are likely to be significant. Initial calculations show that the pressure that will be exerted on public finances is second only to the aging of the population. Furthermore, the fiscal implications of climate change are wide-ranging. Costs may be required to support the green transition and prevent damage caused by climate change. Losses in fiscal revenue will inevitably result from reduced use of fossil fuels. Rising temperatures and extreme weather events will have additional fiscal implications.

The Edison model provides an analytical framework for the study:

1) green transition costs faced by governments as they reduce greenhouse gas emissions;

2) the costs of adapting to and coping with damage caused by extreme climate conditions, guiding users of the model on the key areas to focus on when calculating the impact of climate change on long-term fiscal sustainability. By providing a common methodology, it will help provide the foundations for stakeholders to increase wider public understanding of the fiscal implications of climate change.

The fourth session focused on methods and tools that improve the understanding of fiscal risks and the accuracy of fiscal sustainability analysis so that policymakers can make better decisions for a more secure fiscal future. The Coordinator of the HPBO and Professor of the University of Glasgow, Mr. John Tsoukalas, presented an innovative econometric model under development for early monitoring and quantification of fiscal risks, while a representative of the US Congressional Budget Office (CBO) presented the forecasting model on immigration and the effect it can have on the federal budget and the economy as a whole.

In the fifth section, the new challenges in the communication of fiscal messages to the general public by the Independent Fiscal Institutions were presented. It has been found that the alienation of citizens from traditional news sources and the increase of misinformation through new channels, such as social media, are undermining citizens' trust in democracy. In this environment, Independent Fiscal Institutions can play an important role, promoting understanding of fiscal challenges in a clear and objective manner to strengthen political will for action. The session presented innovative approaches to improve communication of complex economic and fiscal challenges with examples from institutions such as the European Central Bank and the Netherlands Central Planning Office. Both institutions proceeded with an extensive linguistic redesign of their texts and a continuous evaluation of the ease of reading with linguistic tools and a graphic redesign of the printed and digital versions with extensive use of infographics. The benefits and problems of the use of social media and the interactivity of scientific staff with citizens were also discussed. Although the interactivity initially gave positive results, it was later observed that the problems outweighed the benefits as a significant number of users produced aggression and toxicity, a phenomenon that has been observed more widely in the use of social media.

During the working dinner, representatives of the Federal Planning Bureau of Belgium presented the methodology and challenges faced by the Office when evaluating the electoral programs of the parties in the recent elections in Belgium. The evaluation was limited to the programs of the parties that already had a parliamentary presence and had a dynamic character, i.e. it also assessed the macroeconomic consequences of the proposed fiscal measures.