HOW SHOULD A FISCAL UNION FOR EMU LOOK LIKE?

Abstract

The European Economic and Monetary union has never needed more a fiscal union than in current times. High levels of public debt and public deficits, weak soundness of public finances and argues between member states directly affect the long-run stability of the Eurozone. It was our goal to analyze the most recent papers on subject, as a small survey, and to identify the most important elements that a European fiscal union should include. Our research indicates that most out the authors pointed a larger common budget, stabilization and equalization mechanisms, fiscal transfer and coordinated fiscal policies as being the key elements that of a fiscal union. Other specific elements that we have identified are European taxes, a common unemployment system and common fiscal rules. Although the future European fiscal union may not include all the elements that we have spotted, most of them will surely be included, as some of them already exist in the current framework.

Keywords

• fiscal union
• fiscal integration
• emu
• key elements