Euro Area Fiscal Stance: Definition, Implementation and Democratic Legitimacy
In-Depth Analysis
11-07-2016
Despite large automatic stabilizers, the performance of the Euro area as a whole in terms of fiscal stabilization is relatively poor. This report argues that a meaningful fiscal stance for the Euro area should rely on the current account as a complement to the output gap, and be coordinated only in “exceptional” times, the usual bottom-up approach of fiscal policy remaining appropriate for “normal” times. In such setting, the European Fiscal Board would play a key role in advising the Commission on the existence of “exceptional” circumstances, on the adequate aggregate fiscal stance and on its desirable distribution across member states.
In-Depth Analysis
External author
Agnès Bénassy-Quéré
About this document
Publication type
Keyword
- budget policy
- coordination of EMU policies
- economic analysis
- economic analysis
- economic conditions
- economic governance (EU)
- ECONOMICS
- euro area
- EUROPEAN UNION
- European Union law
- FINANCE
- inflation
- monetary economics
- monetary relations
- national budget
- principle of subsidiarity
- public debt
- public finance and budget policy