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Progress Towards Implementing Eu Fiscal Union

Author

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  • Ada-Cristina Marinescu

Abstract

The lack of a common EU fiscal policy is a vulnerability in the context of a new financial crisis. At present, Member States manage their fiscal policy at national level. However, the existence of a unitary fiscal system, following the model of the monetary union or the banking union, would have beneficial effects on Member States, providing them with a higher degree of protection against possible financial crises. During the implementation of the Economic and Monetary Union, a set of common fiscal rules was established for all EU countries. In order to complete the current fiscal union several measures are needed: a mechanism of risk sharing at the EMU level, tougher rules and market discipline to discourage moral hazard, and the coordination of national fiscal policies. Several proposals have been made regarding the implementation of this common fiscal mechanism: the EU budget, the European Investment Stability Function or a European Fiscal Authority.

Suggested Citation

  • Ada-Cristina Marinescu, 2019. "Progress Towards Implementing Eu Fiscal Union," Euroinfo, Institute for World Economy, Romanian Academy, vol. 3(6-7), pages 40-50, July.
    • Handle: RePEc:iem:eurinf:v:3:y:2019:i:6-7:p:40-50
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    File URL: http://www.iem.ro/rem/index.php/euroinfo/article/view/712/793
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    More about this item

    Keywords

    Economic and Monetary Union; Fiscal Union; fiscal rules; common fiscal mechanism;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development

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