Fiscal Federalism

Mark Baimbridge and Philip Whyman

Chapter 10 in Crisis in the Eurozone, 2015, pp 156-170 from Palgrave Macmillan

Abstract: Abstract The 2008 international financial crisis, which was triggered by problems related to sub-prime housing loans and securitisation via collateralised loan obligations and credit-default swaps, led to a deep economic recession across most of the industrialised world. It highlighted not only the fragility of the European banking system, but additionally the flaws in design of the particular form of Economic and Monetary Union (the eurozone) established amongst a number of European Union (EU) member states. The tensions caused by the financial crisis have not caused these problems, however, but rather magnified pre-existing weaknesses that have long been recognised by a number of academic commentators who have written on this topic over the past two decades or more (Eichengreen, 1992; de Grauwe and Vanhaverbeke, 1993; Burkett et al., 1996; Feldstein, 1997; Arestis and Sawyer, 2000; Lane, 2006). Moreover, it is not only the design of the eurozone, and the rules established to limit participation to suitable candidate nations, which have been found to be at fault, but also the economic architecture introduced in an attempt to sustain this new arrangement (Degryse, 2012: 6).

Keywords: European Union; Member State; Fiscal Policy; Monetary Union; European Union Member State (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1057/9781137329035_10

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