Abstract
The reference values of the deficit/GDP ratio and of the debt/GDP ratio are constant and they are equal 3% for the deficit/GDP ratio and 60% for the debt/GDP ratio in European Union countries. The occurrence of extraordinary situations, such as the financial crisis, economic crisis, military conflict or pandemic, often makes it impossible to meet the fiscal criteria when there are constant reference values for deficit/GDP ratio and for debt/GDP ratio. Then, a general escape clause may be activated in the European Union countries, allowing for a temporary deviation from EU Council’s recommendations regarding budgetary policy, provided that such deviation does not threaten the sustainability of public finances in the medium term. Thus, the existence of constant reference values makes it impossible to take activities to support the economy in times of crisis. In this article, we present the selected methods of estimation of the alternative reference values that take into account the cyclical factor of estimating the reference values of macroeconomic fiscal instruments related to deficit/GDP and debt/GDP ratios. We suggest replacing the constant reference values with the variable reference values which can be alternative reference values. We present an empirical analysis for data for Poland. The proposed methodology allows determining the variable reference values that take into account the occurrence of different extraordinary situations, which will imply no necessity to activate an escape clause for fiscal rules and better control of the stability of public finances.