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Fiscal federalism and a separate budget for the euro area

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  • Oręziak Leokadia

    (Collegium of World Economy, Warsaw School of Economics, Poland)

Abstract

The core objective of this paper is to determine the main political and economic conditions and challenges related to the possible evolution of the integration process in the euro area toward fiscal federalism and fiscal union as a way to increase the capacity of the area to cope with future economic and financial crises. The issue of a separate budget for this area is of particular interest in this article. The idea of such a budget has recently become the subject of lively public debate in the European Union and has been a factor in encouraging the European Commission to propose new solutions at the end of 2017 in the field of economic governance of the euro area, including the establishment of a European Monetary Fund. The analysis carried out in this article leads to the conclusion that under the current conditions, there is little chance of introducing such regulatory and institutional changes that would significantly increase the scale of financial transfers between the euro area member states.

Suggested Citation

  • Oręziak Leokadia, 2018. "Fiscal federalism and a separate budget for the euro area," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 54(2), pages 85-98, June.
    • Handle: RePEc:vrs:ijomae:v:54:y:2018:i:2:p:85-98:n:4
    DOI: 10.2478/ijme-2018-0012
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    References listed on IDEAS

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    1. Andrew Hughes Hallett, 2017. "Fiscal autonomy vs. fiscal federalism in the euro zone," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 34(2), pages 179-188, August.
    2. Thirion, Gilles, 2017. "European Fiscal Union: Economic rationale and design challenges," CEPS Papers 12160, Centre for European Policy Studies.
    3. Maria Demertzis & Guntram B. Wolff, 2020. "What are the prerequisites for a euro area fiscal capacity?," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 23(3), pages 342-358, July.
    4. Luca Brugnolini & Luisa Corrado, 2018. "Fiscal Compact and Debt Consolidation Dynamics," CEIS Research Paper 436, Tor Vergata University, CEIS, revised 06 Nov 2018.
    5. Michael D. Bordo & Harold James, 2017. "Partial Fiscalization: Some Lessons on Europe’s Unfinished Business," NBER Working Papers 23220, National Bureau of Economic Research, Inc.
    6. Johannes Kabderian Dreyer & Peter Alfons Schmid, 2015. "Fiscal federalism in monetary unions: hypothetical fiscal transfers within the Euro-zone," International Review of Applied Economics, Taylor & Francis Journals, vol. 29(4), pages 506-532, July.
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    More about this item

    Keywords

    EU; euro area; EMU; fiscal federalism; fiscal policy; fiscal transfers; budget; monetary union;
    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
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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