Stabilisation policies in the European Union countries and the effectiveness of the Stability and Growth Pact

Inmaculada Carrasco Monteagudo and Isabel Pardo Garcia

International Journal of Public Policy, 2006, vol. 1, issue 3, 297-308

Abstract: The Third Phase of the European Economic and Monetary Union and the consequent implementation of the Unique Monetary Policy, advised EU countries to coordinate their fiscal policies, because of the relations between monetary and fiscal policies. The application of the Stability Pact has reduced the discretional nature of national fiscal policy, creating arguments against it, especially in a period with low growth rates. This, without a doubt, will have political consequences in the European integration process. In economic terms, perhaps it is necessary that a deeper fiscal policy could let European systems of social protection act as automatic stabilisers. On the other hand, the stability limits the growth of the public expenses in these countries. The objective of the article is to analyse the different arguments on the effects of the Stability and Growth Pact, taking into account the EU enlargement process.

Keywords: Stability and Growth Pact; fiscal policy; monetary policy; European Union; European integration; social protection; EU enlargement; new Member States. (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijpubp:v:1:y:2006:i:3:p:297-308

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