Fiscal federalism as a solution for the eurozone problems

Rosiak, Tomasz

doi:10.7172/1644-9584.49.10

Cited by 1 publication

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“…Until recently, literature on fiscal federalism has defined only two main boundary conditions of fiscal federalism: presence of a monetary union 1 and a common market (Weingast, 1995). In my paper (Rosiak, 2014b) I introduced the main characteristics of this model based on review of literature of fiscal federalism. The features listed above are typical for the model of fiscal federalism.…”

Section: Has European Union Developed a Model Of Fiscal Federalism?mentioning

confidence: 99%

Fiscal capacity for euro area – towards a bigger EU budget?

Rosiak

2015

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The European Union has recently implemented one of the biggest reform packages in its history. Developed solutions are designed to (1) strengthen EU’s resilience to shocks and (2) improve its shock absorption capabilities. It seems that so far the stress was mainly placed on the first objective. Among the reforms which satisfied the second objective the European Stability Mechanism (ESM) plays the key role. However, this is not the only solution. The European Union is also developing a fiscal capacity for the European Monetary Union (EMU). On the base of a subject literature study, I have developed a model with boundary conditions of fiscal federalism (FF), which then was compared to macroeconomic data for the EU. The results of my findings show that the European Union, and especially the euro area, share a lot of characteristics typical for fiscal federalism. The biggest difference between EMU’s structure and FF model is insufficient size of central budget. As a result, the euro area is not equipped with stabilization tools which could act on the very early stage of a crisis. From this point of view, implementation of fiscal capacity in the form of central budget could fill this gap. However, it could bring further fragmentation of economic integration process in the EU, which probably would not positively contribute towards the stability in the political sphere.

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Section: Has European Union Developed a Model Of Fiscal Federalism?mentioning

confidence: 99%

Fiscal capacity for euro area – towards a bigger EU budget?

Rosiak

2015

Self Cite

View full text Add to dashboard Cite

show abstract

Fiscal federalism as a solution for the eurozone problems

Cited by 1 publication

References 7 publications

Fiscal capacity for euro area – towards a bigger EU budget?

Fiscal capacity for euro area – towards a bigger EU budget?

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