Reforming Europe's stability and growth pact: Lessons from the American experience in macrobudgeting

Savage, James D.; Verdun, Amy

doi:10.1080/09692290701642747

Cited by 13 publications

(3 citation statements)

References 27 publications

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“…Some economists argued that the excessive deficit procedure needs a stronger focus on policies rather than outcomes (Annett et al 2005). The American experience ensures that fiscal targets may actually act as an incentive for politicians to engage in noncompliant behavior (Savage and Verdun 2007).…”

Section: Discussionmentioning

confidence: 99%

Stability and Growth Pact: Too Young to Die, Too Old to Rock ‘n’ Roll

Patsoulis

Psychalis

Deirmentzoglou

2022

JRFM

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This paper discusses the future of the Stability and Growth Pact (hereafter SGP). Although Neoclassical economic models argue that strict fiscal and monetary rules minimize moral hazard and crowding out, in practice many governments adopt fiscal expansion (in recent years in the form of non-standard monetary measures) to mitigate market failures, consequently rethinking monetary rules and targets. Government spending and countercyclical policies are essential tools for soothing business cycles and other market failures. To this end, we empirically test whether current and past forms of the SGP have led to greater convergence, while we critically assess and investigate a possible SGP reform. By adopting more flexible rules, in terms of government spending and fiscal expansion, the Economic and Monetary Union (hereafter EMU) could yield multiple positive spillover effects in long-term economic growth under specific terms and conditions, such as green conditionalities. We conclude that to mitigate the triple crisis threat (economic, environmental and health), what is mostly needed are reforms in the form of fiscal federalism, such as common debt issuance (Eurobonds) that enhance the ability of the EMU to tackle the consequences of the aforementioned crises.

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Section: Discussionmentioning

confidence: 99%

Stability and Growth Pact: Too Young to Die, Too Old to Rock ‘n’ Roll

Patsoulis

Psychalis

Deirmentzoglou

2022

JRFM

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“…After a strong focus on the ECB itself, scholarly focus on legitimacy issues in EMU spread out to the institutional features of EMU as a whole (mainly discussing the question of the need for a gouvernement économique (Dyson 1994;Howarth 2001;Verdun 1996Verdun , 2000 before touching upon connected areas such as the Stability and Growth Pact (Collignon 2004;Verdun 2004, 2010;Howarth 2004;Savage and Verdun 2007), the open method of co-ordination and the Lisbon Strategy (Hodson and Maher 2001;Scharpf 2002), and the EU budget (Enderlein et al 2005). We now briefly review the discussions on the ECB and the overall institutional framework.…”

Section: Emu's Legitimacy: What Have We Learned About the Democratic mentioning

confidence: 99%

EMU's teenage challenge: what have we learned and can we predict from political science?*

Enderlein¹,

Verdun²

2009

Journal of European Public Policy

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We review the initial predictions and claims regarding economic and monetary union (EMU) in Europe against the evidence of its first ten years of existence. We argue that pessimistic views on the creation of EMU have proved to be wrong. Yet EMU's success is rather puzzling, since it is based on a peculiar institutional structure not thought to lead to success. EMU has generated redistributive effects and may have increased business-cycle synchronization. Those effects have not translated into the expected decrease of legitimacy or a widespread democratic deficit of EMU. At the institutional level, EMU has coped well with an asymmetric framework, largely decoupling EMU from political union. There have been neither major spill-over effects pushing for further political integration nor conflict and disintegration. The main question for the future is whether this institutional structure will stay the same in the aftermath of the global financial crisis.

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“…This body of rules that seeks to deal with the lack of a centralised economic government at the European level and the fact that monetary and fiscal policies need to be coordinated has seen the most criticism by economists of all aspects of EMU design (see Savage and Verdun, 2007 for criticisms and for a list of suggested policy solutions). Many economists have criticised the SGP for being 'stupid', 'ridiculous', 'insane' and the like.…”

Section: Emu and The Sgpmentioning

confidence: 99%

Ten years EMU: an assessment of ten critical claims

Verdun

2010

IJEBR

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This paper seeks to review a selection of ten salient critical claims about Economic and Monetary Union (EMU) that were heard in the 1990s in either the Political Science literature or the Economics literature or both. In this paper, the author focuses on five salient Political Science claims and five Economics claims prominent at the time that pointed to problems with EMU that could undermine its viability. As we will see, based on an assessment of the first ten years of EMU, almost none of these claims -to date -turned out to be a problem.

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Reforming Europe's stability and growth pact: Lessons from the American experience in macrobudgeting

Abstract: Proposed and actual reforms to the European Union (EU) Stability and

Cited by 13 publications

References 27 publications

Stability and Growth Pact: Too Young to Die, Too Old to Rock ‘n’ Roll

Stability and Growth Pact: Too Young to Die, Too Old to Rock ‘n’ Roll

EMU's teenage challenge: what have we learned and can we predict from political science?*

Ten years EMU: an assessment of ten critical claims

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