Fiscal Policy Coordination and the Stability and Growth Pact

Horst Tomann
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Horst Tomann: Freie Universitaet (FU) Berlin

Chapter 5 in Monetary Integration in Europe, 2017, pp 81-104 from Palgrave Macmillan

Abstract: Abstract The establishment of a monetary union in Europe has created a new ‘assignment problem’, that is the roles assigned to the institutions of economic and monetary policy had to be redefined. Chapter 5 analyses how this assignment problem has been resolved. First it addresses the basic conflict of fiscal policy, the conflict of discipline and flexibility. On the one hand, fiscal discipline in public budgets back up the credibility of monetary policy. On the other hand, fiscal policy should be able to respond flexibly to asymmetric shocks. The chapter then describes the coordination rules of the Stability and Growth Pact and its amendments and evaluates fiscal policies in the Economic and Monetary Union.

Keywords: Fiscal Policy Coordination; Growth Pact; Monetary Union; Public Budget; The Functioning Of The European Union (TFEU) (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:pal:stuchp:978-3-319-59247-3_5

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DOI: 10.1007/978-3-319-59247-3_5

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