Steps towards a European Fiscal Union

Has the revised Stability and Growth Pact delivered so far

Bibliographic Data

ID12943704
AuthorsMarin Mileusnić (0000-0002-2158-9518, corresponding author)
Year2021
Volume17
Issue3
Publication date2021-09-10
Open AccessYes
TypeARTICLE
VenueJournal of Contemporary European Research (JOURNAL)
Journal identifiersISSN: 1815-347X • E-ISSN: 1815-347X
PublisherUACES (PUBLISHER • GB)
DOI10.30950/jcer.v17i3.1123
OpenAlexW3199321892
LanguageEN
Citations received2
References cited6

Since 2008-09, the European Union (EU) experienced two major economic crises revealing all the flaws of the existing model of economic governance. By leaving the majority of the countries with high levels of deficit and public debt, the two crises have shown that the Economic and Monetary Union (EMU) is indeed an unfinished project where the monetary union alone is not sufficient to safeguard the entire EU economy. To strengthen the EMU and to mitigate future risks that could possibly lead to the collapse of the euro-area, many called for a deeper fiscal integration by creating a central fiscal capacity for the EMU or, in other words, a fiscal union. Due to the present political unfeasibility of such an endeavour, however, concrete steps towards a European Fiscal Union (EFU) have been modest and the revised Stability and Growth Pact (SGP) remains its core building block. As the Pact defines supranational and shapes the creation of national fiscal rules, maintaining its credibility continues to be vital. This article analyses the effects of the fiscal rules on the public finances of the member states. It is assumed that by adhering to the supranational and adopting quality domestic fiscal rules, the member states are better equipped in remaining fiscally prudent, thus also affirming the revamped SGP as a solid base for the furthering of the EFU. The two-track evaluation approach defines dynamic panels for the EFU as a whole and for the selected country groups. It finds certain benevolent effects on budgetary performance at the EFU level, as well as for the countries with higher quality of the fiscal rules

Austerity · Credibility · Economic and monetary union · Economic policy · Economics · European integration · European union · Fiscal policy · Fiscal union · International economics · Maastricht Treaty · Macroeconomics · Member states · Political science · Political union · Politics · Public finance · Stability and Growth Pact · European Monetary and Fiscal Policies · Fiscal Policies and Political Economy · Law · Regional Development and Policy

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