scholarly journals The EU’s Economic Governance: Development in the Context of Modern Challenges

2020 ◽  
Vol 47 (4) ◽  
pp. 49-57
Author(s):  
Nadiia RUDIK
Keyword(s):  
Maastricht Treaty ◽  
Economic Governance ◽  
Economic Policies ◽  
Governance System ◽  
Single Currency ◽  
Member States ◽  
Growth Pact ◽  
The Stability ◽  
Over Time ◽  
The Eu

The article explores the key milestones in the evolution of the economic governance system in the EU in the context of the current challenges facing the European economy. The European single currency is one of the most significant and tangible achievements of a United Europe, and is therefore not just a monetary project. It provides a basis for economies of the Member States to become more integrated with a view to supporting greater stability and prosperity. The architecture of the Economic and Monetary Union, established by the Maastricht Treaty in 1992, is unique whereas it combines a single monetary policy that pursues the objective of price stability with decentralized fiscal and economic policies under the responsibility of Member States. In light of those considerations, the Treaty requires Member States to regard their economic policies as a matter of common concern and to coordinate them within the Council that is, at the intergovernmental level. Since the early 1990s, when the Maastricht Treaty laid the foundations of the single currency area, the EU has developed a very comprehensive and detailed framework for economic and fiscal surveillance. The framework is laid down in a range of secondary legislation, as well as in other documents that provide more details and transparency on how surveillance is carried out in practice. The framework has evolved in waves over time, with changes introduced in response to the emergence of new economic challenges, as well as based on the lessons gained in the implementation of the surveillance framework. In 1997, the Stability and Growth Pact (SGP) was established so as to strengthen the monitoring and coordination of national fiscal and economic policies to permanently enforce the deficit and debt limits established by the Maastricht Treaty for all Member States. In the early 2000s, adherence to the nominal deficit targets of the SGP proved difficult for some Member States in a recessionary environment. That is why the SGP was reformed to allow for greater consideration of economic conditions. In response to the vulnerabilities exposed by the economic and financial crisis that hit the EU and the euro area after 2007, the EU took a series of measures to strengthen its economic governance and surveillance framework. They are relevant for all Member States, but have a number of specific features for those that use the euro. The revamped macroeconomic and budgetary surveillance were integrated into the European Semester, a common timeline for the coordination of economic and employment policies at EU level, and which was established in the same context. Thus, the EU’s economic governance has strengthened and improved over time, evolving in the context of historical events. Its future will depend, in particular, on which scenario for further development the EU ultimately chooses.

scholarly journals European Union’s Fiscal Rules and New Financial Instruments for 2021- 2017: Bulgaria’s Case Study

2021 ◽  
Vol 1 (1) ◽  
pp. 26-35
Keyword(s):  
European Commission ◽  
Fiscal Rules ◽  
Financial Instruments ◽  
The European Union ◽  
Economic Cycle ◽  
Member States ◽  
Growth Pact ◽  
The Stability ◽  
The Eu

Fiscal policymaking of the Member States aims to follow fiscal rules through the economic cycle that ensure macroeconomic sustainability in the European Union (EU). After the 2008 global crisis, the Stability and Growth Pact introduced the enhanced supranational fiscal rules, setting additional boundaries to fiscal deficits and government debt. The new ceiling on the structural deficit in public finance laws of Member States has served to protect creditworthiness. The COVID-19 pandemic, which led to a temporary suspension of the fiscal rules, clearly indicates that the key challenges are to implement a countercyclical policy during upturns, building buffers for bad days. Under the Next Generation Europe’s initiative the European Commission (EC) will borrow up to €750 billion and distribute it over 2021-2024 to Member States (European Commission, 2020a). Raising funds in the EU budget and repayment of the EC debt may lead to amendments to the design and application of the EU fiscal rules. This paper lays out the objectives of the EU current fiscal framework and its main pillars, discusses how the EC new financial instruments for the period 2021-2027 will be accounted for in the Member States’ fiscal framework, and what are its possible changes and challenges after Covid-19 and Brexit.

Subsidiarity as a Subject of Battle in European Union Politics

2020 ◽  
Author(s):  
Kees van Kersbergen ◽  
Bertjan Verbeek
Keyword(s):  
European Union ◽  
Power Relations ◽  
Political Process ◽  
Maastricht Treaty ◽  
Lisbon Treaty ◽  
The Political ◽  
The European Union ◽  
Member States ◽  
Over Time ◽  
The Eu

Since the Maastricht Treaty (1993), subsidiarity has guided the political process surrounding the distribution of competences between administrative layers in the European Union (EU). The EU’s subsidiarity regime affects the politics and governance of the EU, because the notion of subsidiarity allows for continuous negotiation over its practical use. The constant battle over subsidiarity implies that the notion changes its meaning over time and alters the power relations between different actors within the EU. Since the Lisbon Treaty (2009), subsidiarity has mainly strengthened the position of member states at the expense of the Commission.

Taking Stock of the EU Fiscal Rules over the Past 20 Years and Options for Reform

2019 ◽  
Vol 239 (5-6) ◽  
pp. 861-894
Author(s):  
Christophe Kamps ◽  
Nadine Leiner-Killinger
Keyword(s):  
Monetary Policy ◽  
Euro Area ◽  
Maastricht Treaty ◽  
Fiscal Rules ◽  
Stability And Growth Pact ◽  
Public Finances ◽  
The Past ◽  
Growth Pact ◽  
The Stability ◽  
The Eu

Abstract This paper reviews how the European Union’s fiscal rules have developed from the Maastricht Treaty that established the single monetary policy up until today. It shows that the design of these rules did not always follow economic logic but often resulted from political constraints, giving rise to some flaws in the framework from its very beginning. At the same time, the repeated attempts to adjust the fiscal framework to a multitude of circumstances over the past 25 years have made it overly complex and incoherent. Based on a finding that euro area countries’ compliance with the EU fiscal rules has been unsatisfactory, the paper concludes that in its current shape the Stability and Growth Pact is an insufficient disciplining device in good economic times, with the consequence that there are no fiscal buffers, in particular in high-debt countries, such that growth can be supported in economic troughs. Based on this finding, the paper reviews reform options for making the fiscal framework more effective in bringing about sounder public finances and avoiding the pro-cyclicality observed over the past two decades.

Eu Fiscal Governance on The Member States: The Stability and Growth Pact and Beyond

2020 ◽  
Author(s):  
Jean-Paul Keppenne
Keyword(s):  
Economic Policy ◽  
Fiscal Policy ◽  
Maastricht Treaty ◽  
Stability And Growth Pact ◽  
Member States ◽  
The Core ◽  
Growth Pact ◽  
Fiscal Planning ◽  
The Stability

As explained in the previous chapter, the Maastricht Treaty put in place a mild system of coordination in the area of economic policy, in particular fiscal policy. The Member States keep conducting their fiscal policy, particularly the adoption of budgets and the exercise of taxation power which are at the core of the sovereignty of the states. The Member States thus remain largely sovereign with regard to the conduct of their budgetary policies given that their annual budget, as well as their longer-term fiscal planning are still decided by the national authorities. The Union has no competence to interfere directly in this area acting in place of the national authorities. Notably, no veto right is provided, and the Union could not somehow prevent the adoption of national budgets.

Are better defined rules enough? An assessment of the post-crisis reforms of the governance of EMU

2013 ◽  
Vol 19 (1) ◽  
pp. 49-62 ◽  
Author(s):  
Iain Begg
Keyword(s):  
Monetary Integration ◽  
Economic Governance ◽  
Economic Policies ◽  
Governance System ◽  
Policy Model ◽  
The Core ◽  
Set Up ◽  
The Stability ◽  
Core Features ◽  
Governance Reforms

The extensive economic governance reforms in the euro area since 2010 have put in place a system (EMU 2) that is intended to be more intrusive, prescriptive and enforceable in constraining Member State economic policies. It can be characterized as a recasting of the stability-orientated framework which is intended to correct the acknowledged shortcomings of the original set-up (EMU 1), but does not fundamentally alter the policy model. Rather its ambition is to be more effective, notably in implementation. This article revisits the economic arguments for monetary integration and considers whether the core features of the new model and the economic logic that underpins them will improve the governance of EMU in assuring macroeconomic stability. It draws attention to remaining gaps in the governance system and discusses possible further reforms.

El control democrático y la rendición de cuentas en el Pacto de Estabilidad y Crecimiento

2018 ◽  
pp. 77-112
Author(s):  
Andreu OLESTI RAYO
Keyword(s):  
Stability And Growth Pact ◽  
Economic Policies ◽  
National Parliaments ◽  
European Monetary ◽  
Eu Member States ◽  
Growth Pact ◽  
The Stability ◽  
Budgetary Power ◽  
The Eu ◽  
Economic And Financial Crisis

LABURPENA: Europar Batasuneko herrialdeetako aurrekontu-diziplina zorrotz ziurtatzeko sortu zen bere garaian Egonkortasunerako eta Hazkunderako Ituna (EHI); batez ere, Ekonomia eta Diru Batasuneko partaideen aurrekontu-diziplina ziurtatzeko. Krisi ekonomiko eta finantzarioaren krisiak EHIa errebisatu beharra ekarri zuen, eta era askotako arau-egintzen multzo bat ezarri zen horren ondorioz. Gaur egun, estatuetako politika ekonomikoak zorrotzago koordinatzen eta ikuskatzen dituzte EBko erakundeek. Aplikatzeko arauak eta prozedurak direla-eta gardentasuna galdu egiten da, eta horrek kalte egiten dio kontu emateari. Gainera, herrialdeetako parlamentuei aurrekontuak maneiatzeko gaitasuna murriztu egin zaie, eta murrizketa hori ez da konpentsatu Europako Parlamentuaren egoera hobetuz, izan ere, EHIa eraldatu ondoren, erakundeen arteko harremanetan daukan posizio erlatiboa okerragoa da orain. RESUMEN: El Pacto de Estabilidad y Crecimiento (PEC) fue creado para garantizar, de forma efectiva, la disciplina presupuestaria de los países de la Unión Europea (UE) en general y de los participantes en la Unión Económica y Monetaria en particular (UEM). La crisis económica y financiera motivó una revisión de la PEC mediante un conjunto de actos normativos de diversa naturaleza cuyo resultado ha llevado a una coordinación y supervisión más estrecha de las políticas económicas estatales por las instituciones de la UE. La complejidad de las normas y sus procedimientos de aplicación ocasiona una falta de transparencia que afecta a su rendición de cuentas. Además los parlamentos nacionales han visto limitado el ejercicio de su poder presupuestario y está contracción no se ha compensado con la mejora de la situación del Parlamento Europeo, pues tras la modificación de la PEC su posición relativa en las relaciones interinstitucionales ha empeorado. ABSTRACT: The Stability and Growth pact (SGP) was created to effectively guarantee the budgetary discipline within the EU Member states in general and within the European Monetary Union (EMU) participants in particular. The economic and financial crisis motivated an amendment upon the SGP by means of a set of normative acts of different kinds whose result has led to a closer coordination and supervision of state economic policies by the EU institutions. The complexity of rules and its application procedures result in a lack of transparency that affect its accountability. Besides national parliaments have had the exercise of their budgetary power limited and that constrainement has not been offset with the improvement of the European Parliament situation since after the SGP amendment, its relative position within the interinstitutional relationships had been worsened.

scholarly journals Analysis of Fiscal Rules in the European Monetary Union

2015 ◽  
Vol 4 (1) ◽  
pp. 19-33 ◽  
Author(s):  
Damir Šehović
Keyword(s):  
Fiscal Policy ◽  
Policy Coordination ◽  
Fiscal Rules ◽  
Fiscal Policies ◽  
Convergence Criteria ◽  
Member States ◽  
Growth Pact ◽  
Fiscal System ◽  
The Stability ◽  
The Eu

Abstract : The EMU fiscal system is specific in many areas compared to other classic fiscal systems of national states. Specific features mainly reflect in the implementation of economic policy within the EMU which is carried out by combining a common centralized monetary policy under the ECB jurisdiction and decentralized fiscal policies under the jurisdiction of the member states. The member states` sovereignty in governing their fiscal policies is one of the key causes of the EU fiscal system underdevelopment, i.e. its indigent structure in relation to “standard fiscal systems”. More indigent structure of the EU fiscal system is reflected in the fact that it consists of only three segments. The first one refers to the EU budget which is also the only instrument for implementing fiscal policy at the supranational level. The second one refers to the harmonization of taxation systems in accordance with inputs and other legislation adopted at the EU level with the aim of fostering the single internal market. Finally, the third segment refers to the fiscal policy coordination of the EMU member states related to appropriate fiscal rules, which mainly stem from the Maastricht convergence criteria and the Stability and Growth Pact.

Political aspects of security of the European Union Member States

2020 ◽  
pp. 97-105
Author(s):  
Aleksandra Kusztykiewicz-Fedurek
Keyword(s):  
European Union ◽  
Negative Impact ◽  
The European Union ◽  
Member States ◽  
Eu Member States ◽  
Political Security ◽  
New Institutions ◽  
The Stability ◽  
Key Aspects ◽  
The Eu

Political security is very often considered through the prism of individual states. In the scholar literature in-depth analyses of this kind of security are rarely encountered in the context of international entities that these countries integrate. The purpose of this article is to draw attention to key aspects of political security in the European Union (EU) Member States. The EU as a supranational organisation, gathering Member States first, ensures the stability of the EU as a whole, and secondly, it ensures that Member States respect common values and principles. Additionally, the EU institutions focus on ensuring the proper functioning of the Eurozone (also called officially “euro area” in EU regulations). Actions that may have a negative impact on the level of the EU’s political security include the boycott of establishing new institutions conducive to the peaceful coexistence and development of states. These threats seem to have a significant impact on the situation in the EU in the face of the proposed (and not accepted by Member States not belonging to the Eurogroup) Eurozone reforms concerning, inter alia, appointment of the Minister of Economy and Finance and the creation of a new institution - the European Monetary Fund.

THE EUROPEAN UNION AND ITALY RELATIONS IN THE CONTEXT OF SUPRANATIONAL FISCAL REGULATION

2021 ◽  
pp. 208-221
Author(s):  
Dmitrii О. Mikhalev ◽  
◽  
Egor’ A. Sergeev ◽  
Keyword(s):  
European Union ◽  
Budget Deficit ◽  
Stability And Growth Pact ◽  
The European Union ◽  
Internal Factors ◽  
Growth Pact ◽  
Discretionary Fiscal Policy ◽  
The Government ◽  
The Stability ◽  
The Eu

The article presents a retrospective analysis of relations between the government of Italy and the European Union institutions in the context of supranational fiscal regulation in 2002–2019. The authors analyze the influence of external and internal factors on the state of public finance in Italy, note the reasons that made it difficult to meet the requirements of the Stability and Growth Pact, study the main issues on the agenda in the EU-Italy relations and their evolution. The authors also come to conclusion that unlike the earlier discussions about correcting budget deficit in Italy, current focus of supranational fiscal governance is shifted to preventing it, what challenges the economic sovereignty of Italy and country’s opportunities to conduct a discretionary fiscal policy.

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