EU FISCAL CAPACITY PDF Download

Author: FEDERICO. FABBRINI
Publisher: Oxford University Press
ISBN: 0198874227
Category :
Languages : en
Pages : 193

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Author: Mr.Nathaniel G Arnold
Publisher: International Monetary Fund
ISBN: 1484348176
Category : Business & Economics
Languages : en
Pages : 57

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This note outlines a concrete proposal for a euro area central fiscal capacity (CFC) that could help smooth both country-specific and common shocks. Specifically, it proposes a macroeconomic stabilization fund financed by annual contributions from countries that are used to build up assets in good times and make transfers to countries in bad times, as well as a borrowing capacity in case an exceptionally large shock exhausts the fund’s assets. To address moral hazard risks, transfers from the CFC—beyond a country’s own net contributions—would be conditional on compliance with the EU fiscal rules. The note also discusses several features aimed at avoiding permanent transfers between countries and making the CFC function as automatically as possible—to limit the scope for disputes over its operation—both of which are important points to make it politically acceptable.

Author: Roel Beetsma
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Based on a conjoint survey experiment we explore the support among European citizens for a European Union (EU) budgetary assistance instrument to combat adverse temporary or permanent economic shocks hitting Member States. Suitably designed, there is quite substantial support for such an EU instrument generally and across the sample countries. Support is broader when budgetary support is conditional on debt reduction in normal times and spent in specific policy areas, in particular healthcare and education. Support also increases when there is a role for the European Commission in terms of monitoring and providing guidance. However, there is little support for policy packages that terminate a program and impose a fine in the case of non-compliance. Further, there is broad acceptance of long-run redistribution towards poorer countries. Financing the assistance through a progressive tax increase is more popular than through a flat tax increase. In general, there is substantial scope for constructing assistance packages that command a majority support in all sample countries. The survey was fielded in the midst of the COVID-19 crisis, in which the prospect of a severe economic shock became realistic. However, the results of our survey are based on respondent views in a (partially) pre-political environment: respondents had the opportunity to reason and form their own opinion about the assistance package before concrete policy proposals were debated by political parties that seek the edges of polarization.

Author:
Publisher: Oxford University Press
ISBN: 0192569724
Category : Law
Languages : en
Pages : 321

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Fiscal federalism refers to the division of fiscal powers — powers to tax and spend — between different levels of government. The European Union (EU) is often seen as a legislative giant on clay feet, and one of the principal reasons for this feebleness is the lack of a significant fiscal capacity at the Union level. EU Fiscal Federalism: Past, Present, Future explores ten aspects of the EU's fiscal constitution relating both to the fiscal limits it imposes on Member States and the evolution of its own fiscal policy. Bringing together an international and distinguished group of scholars, this volume analyses the different legal dimensions of fiscal federalism within the EU, from the various aspects of the single market (free movement, banking union, state aid, tax harmonisation) to the EU's budget and Economic and Monetary Union. The essays provide a fascinating overview of the topic as well as a detailed analysis of where EU fiscal federalism stands today and how it might develop in the future. Sweeping and thorough, EU Fiscal Federalism addresses topics vital to maintaining and strengthening the Union's fiscal capabilities. It will appeal to academics and students of European Union law and political economy as well as European policymakers.

Author: Mr. Nathaniel G Arnold
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 49

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The EU’s fiscal framework needs reform. While existing fiscal rules have had some impact in constraining deficits, they did not prevent deficits and debt ratios that have threatened the stability of the monetary union in the past and that continue to create vulnerabilities today. The framework also has a poor track record at managing trade-offs between containing fiscal risks and stabilizing output. Finally, the framework does not provide sufficient tools for EU-wide stabilization. This was most visible during the decade following the euro area sovereign debt crisis, when structurally low real interest rates stretched the policy tools of the European Central Bank (ECB), leading to a persistent undershooting of its inflation target. This paper proposes a new framework based on risk-based EU-level fiscal rules, strengthened national institutions, and a central fiscal capacity. First, risk-based EU-level fiscal rules would link the speed and ambition of fiscal consolidation to the level and horizon of fiscal risks, as identified by debt sustainability analysis (DSA) using a common methodology developed by a new and independent European Fiscal Council (EFC). The 3 percent deficit and 60 percent debt reference values would remain. Second, all member countries would be required to enact medium-term fiscal frameworks consistent with the EU-level rules—that is, to ensure convergence over the medium-term to an overall fiscal balance anchor by setting expenditure ceilings. Independent national fiscal councils (NFCs) would have a much stronger role to strengthen checks and balances at the national level (including undertaking or endorsing macroeconomic projections and performing DSAs to assess fiscal risks). The European Commission (EC) would continue to play its key surveil¬lance role as articulated in the Maastricht Treaty and the EFC would be the center of a peer network of fiscal councils. Third, building on the recent experience with the NextGenerationEU (NGEU), an EU fiscal capacity (FCEU) would improve euro area macroeconomic stabilization and allow the provision of common EU public goods—a task that has become more urgent given the green transition and common security concerns. Central to the proposal is a mutually reinforcing relationship between EU rules and national-level imple¬mentation. Strengthening implementation requires both better national ownership of the rules and their application and greater congruence of national-level frameworks with EU-level rules. The former can only be achieved by rules that convincingly balance the needs of members with the avoidance of negative externali¬ties across members. This argues for a risk-based approach—the first pillar of our proposal. The latter requires a stronger role for significantly upgraded national level frameworks—the second pillar of our proposal.

Author: Marco Buti
Publisher:
ISBN:
Category : Fiscal policy
Languages : en
Pages : 0

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Book Description
A central fiscal capacity (CFC) in the European Union (EU) can in principle perform three roles: provide cyclical stabilisation, support national reforms and investment, and deliver European Public Goods. We build a simple aggregate demand-aggregate supply model, where a CFC depends on shocks and degrees of compliance with common fiscal rules. This analytical framework allows us to examine the policy implications of the three options for a CFC. Based on both the theoretical analysis and the EU’s experience in handling the global financial crisis and the pandemic, we show that a CFC would improve policy efficiency by focusing on stabilisation in the event of negative demand shocks and on boosting potential output in the event of negative supply shocks. In the current stagflationary environment, the provision of European Public Goods appears to be the most promising avenue. The need to calibrate the central interventions in relation to the typology of shocks implies that a CFC cannot be put on an automatic pilot. CFC calls for a reform of the euro-area institutional set up, including the creation of a European Minister for Economic Affairs in charge of the "vertical coordination" of the EU’s and national budgets and the calibration of the centralised expenditures.

Author: Nazaré da Costa Cabral
Publisher: Routledge
ISBN: 1000096548
Category : Business & Economics
Languages : en
Pages : 317

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This book provides a much-needed detailed analysis of the evolution of Europe over the last decade, as well as a discussion about the path of reform that has been trodden in the aftermath of the financial crisis. It offers a multidisciplinary view of the E(M)U and captures the main factors that induced the reform of the monetary union – a process that has not been linear and is far from being concluded. The author examines the policy responses designed throughout the development of the crisis and assesses the scale of the crisis in Europe, in comparison to other parts of the world, as well as its prolonged effects both in economic and financial terms. An update on the current ‘state of the art’ in the conception of risk-sharing mechanisms is provided. With its innovative approach, the book analyses the financing issues which need to be taken into consideration in the design of these instruments and highlights the main categories of governmental risk-sharing mechanisms – in particular, the ones to be used as ‘fiscal capacity’. This is a timely and topical book and will be of interest to a broad audience, including experts, scholars and students of European affairs, particularly those with economic, financial, legal and political science backgrounds.

Author:
Publisher:
ISBN: 9789294661722
Category :
Languages : en
Pages : 0

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The EU's domestic and international agendas are usually discussed in different fora and follow separate tracks. Given the fallout from the Covid crisis and the dramatic consequences of the Russian invasion of Ukraine, this paper argues that these agendas should eventually merge. A central fiscal capacity is a key element for reconciling the EU's domestic and international goals. Domestically, it would help to achieve a balanced policy mix and ensure an adequate supply of European public goods, and globally it would give credibility to the geo-economic role of the EU.

Author: Amedeo Fossati
Publisher: Routledge
ISBN: 1134632134
Category : Business & Economics
Languages : en
Pages : 429

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To what extent should local and regional governments in the European Union be allowed to determine their own fiscal policies? This book explores the core issues of fiscal federalism in the European context. It combines theoretical and empirical analysis in addressing such questions as: * what sort of fiscal federalism is appropriate in the European Community * what are the dangers of more centralization * what are the costs of greater decentralization

Author: Pablo Burriel
Publisher:
ISBN: 9789289942454
Category :
Languages : en
Pages :

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After the financial and economic crisis in Europe, a broad consensus has emerged that a stronger fiscal dimension may be needed to complete the architecture of Economic and Monetary Union (EMU). This paper analyses the performance of interregional transfers in existing fiscal-federal systems, notably in Austria, Belgium, Germany, Spain and the United States, and aims to draw lessons for the design of a euro area fiscal instrument. The empirical risk-sharing analysis in this paper suggests that effective cross-regional stabilisation of asymmetric shocks tends to work via direct cash transfers to households, such as unemployment benefits, which are financed out of cyclical central government taxes and social security contributions. This would suggest that a euro area budgetary instrument for stabilisation should be designed as a tool that enhances the automatic stabilisation capacity in the single currency area. At the same time, it seems important that a prospective central stabilisation instrument for the euro area would be integrated in an overall fiscal policy framework that ensures proper incentives for national policymakers.