Trinitatea imposibila in Uniunea Economica si Monetara. Moduri de solutionare

Aurel Iancu
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Aurel Iancu: Institutul National de Cercetari Economice al Academiei Române

Studii Economice from Institutul National de Cercetari Economice (INCE)

Abstract: This article is a review of the economic literature on the attempt to solve the problem of the impossible trilemmas of the euro area by reconciling the relations between the three essential pillars – supranational monetary independence, national fiscal independence and the no-bailout clause applied in the union of states with single currency. The analyses carried out show that the first countries to fall victim to the economic and financial crisis where the least developed with high levels of public debt and which did not respect the nominal convergence criteria. The wide range of measures taken following the crises aimed not only at economic recovery, but also at significant changes in the architecture of the essential pillars and the relations between them by applying a mix of policies to relax these restrictive relations and accompanied by measures to respect financial and fiscal discipline. On the other hand, in order to resolve critical moments of financial balances, including insolvency, special intervention fund and financial facilities were created. It was the transition from the no bail-out clause to the explicit bail-out regime. The last section also reveals the existence of a significant upward trend in measures and reforms which support increasing efficiency of actions and fiscal competences at the EU and member state levels. The text emphasizes the EU’s contribution to simplify and modernize the fiscal system of the member states. In the new conditions, fiscal policy should no longer be seen as a state of opposition between the common fiscal policy and the sovereign fiscal policy, but rather as a state of cooperation and support given to the member states under the conditions of the wide application of the principles of subsidiarity and proportionality.

Keywords: impossible trilemma; essential pillars; single currency independence; national fiscal independence; no bailout clause; explicit bail-out regime; insolvency; compatibility; crisis; mix policies; quantitative easing; financial funds and facilities; principle of subsidiarity (search for similar items in EconPapers)
JEL-codes: A12 B41 E32 E42 E52 E58 E63 F02 F6 H2 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2025-08
New Economics Papers: this item is included in nep-eec
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Persistent link: https://EconPapers.repec.org/RePEc:ror:seince:250821

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