Steps towards a European Fiscal Union: Has the revised Stability and Growth Pact delivered so far?
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...
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| Format: | Article |
| Language: | English |
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UACES
2021-09-01
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| Series: | Journal of Contemporary European Research |
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| Online Access: | https://jcer.net/index.php/jcer/article/view/1123 |
| _version_ | 1798027322985545728 |
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| author | Marin Mileusnic |
| author_facet | Marin Mileusnic |
| author_sort | Marin Mileusnic |
| collection | DOAJ |
| description | 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. |
| first_indexed | 2024-04-11T18:49:32Z |
| format | Article |
| id | doaj.art-5718915979ee44eea5ff90fc1318d188 |
| institution | Directory Open Access Journal |
| issn | 1815-347X |
| language | English |
| last_indexed | 2024-04-11T18:49:32Z |
| publishDate | 2021-09-01 |
| publisher | UACES |
| record_format | Article |
| series | Journal of Contemporary European Research |
| spelling | doaj.art-5718915979ee44eea5ff90fc1318d1882022-12-22T04:08:26ZengUACESJournal of Contemporary European Research1815-347X2021-09-0117310.30950/jcer.v17i3.1123Steps towards a European Fiscal Union: Has the revised Stability and Growth Pact delivered so far?Marin MileusnicSince 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.https://jcer.net/index.php/jcer/article/view/1123Fiscal rulesFRISGPPublic financesEMUFiscal union |
| spellingShingle | Marin Mileusnic Steps towards a European Fiscal Union: Has the revised Stability and Growth Pact delivered so far? Journal of Contemporary European Research Fiscal rules FRI SGP Public finances EMU Fiscal union |
| title | Steps towards a European Fiscal Union: Has the revised Stability and Growth Pact delivered so far? |
| title_full | Steps towards a European Fiscal Union: Has the revised Stability and Growth Pact delivered so far? |
| title_fullStr | Steps towards a European Fiscal Union: Has the revised Stability and Growth Pact delivered so far? |
| title_full_unstemmed | Steps towards a European Fiscal Union: Has the revised Stability and Growth Pact delivered so far? |
| title_short | Steps towards a European Fiscal Union: Has the revised Stability and Growth Pact delivered so far? |
| title_sort | steps towards a european fiscal union has the revised stability and growth pact delivered so far |
| topic | Fiscal rules FRI SGP Public finances EMU Fiscal union |
| url | https://jcer.net/index.php/jcer/article/view/1123 |
| work_keys_str_mv | AT marinmileusnic stepstowardsaeuropeanfiscalunionhastherevisedstabilityandgrowthpactdeliveredsofar |