Europe / The Euro and Budget Policy

Testo disponibile solo in lingua inglese.
The EMU’s work in Europe is a case apart in economic history. This article analyses the future role of budget policies in countries in the euro area and seeks to draw cues from the past experience. The traditional anti-cyclical function of budget policies is questioned and will be questioned and modified by membership to the single monetary space. It will thus be necessary to coordinate such policies among the various Member States and with ECB policy to prevent effects from being irrelevant or even negative for the countries in question, for other Member States and for the euro area as a whole. From this point of view, the long-term objective is to create a federal budget for the Union. It would also be useful to harmonise some aspects of fiscal policies to avoid economic costs and distortions in the allocation of resources, while still maintaning fiscal competition among the Member States.