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Economy and Finance

The expenditure benchmark

This benchmark is a rule which contains the net growth rate of government spending at or below a country’s medium-term potential economic growth rate, depending on the country's position in relation to its medium-term budgetary objectives (MTOs).

Under the expenditure benchmark, spending increases which go beyond a country’s medium-term potential economic growth rate must be matched by additional discretionary revenue measures. The expenditure benchmark complements the medium-term budgetary objectives (MTO) by putting growth in net expenditure on a sustainable path and therefore helping to move towards or maintain the MTO itself.

The expenditure benchmark was introduced as part of the 2011 reforms (the so-called "six pack").