The rise of common public debt in Europe: a new chapter in fiscal integration?

Ad Riet ()
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Ad Riet: United Nations University-Institute on Comparative Regional Integration Studies (UNU-CRIS)

Economia Politica: Journal of Analytical and Institutional Economics, 2024, vol. 41, issue 2, No 13, 617-638

Abstract: Abstract Common public debt in Europe is on the rise. Could it open a new chapter in fiscal integration? Over the past 15 years it has gained in prominence to provide collective funds for financial assistance and investment projects to meet common objectives, in particular when national budgets were stretched. This article reviews how the political focus of the Member States on keeping the financial position of the European Union (EU) under tight control has given way to large-scale common public debt issuance as the logical but still exceptional response to a crisis, pandemic, or war that demands collective action. To open a new chapter in fiscal integration, Member States will need to grant the EU a permanent option to borrow capital within pre-defined limits as well as a standing source of tax revenues for fulfilling its stabilisation, redistribution, and allocation functions. A central fiscal capacity with a permanent role for common public debt in turn requires effective central fiscal surveillance to secure sound national public finances.

Keywords: European Union; Common public debt; Crisis management; Fiscal integration (search for similar items in EconPapers)
JEL-codes: F34 F45 G15 H63 H77 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s40888-024-00326-1

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