 Will Fiscal Policy Be Effective Under EMU?M. Cangiano and Eric Mottu No 1998/176, IMF Working Papers from International Monetary Fund Abstract: European Economic and Monetary Union does not envisage creating a central fiscal authority. Monetary and exchange rate policies will be centralized, but fiscal policy will remain a national responsibility, in line with the subsidiarity principle. This paper argues that monetary union will generate pressures for closer economic integration than currently envisaged. Although not a necessity, a more active central role could then be justified on the grounds of allocative efficiency, redistribution, and stabilization. While in the short term enhanced policy coordination may address those pressures satisfactorily, as economic integration proceeds, the case for a central fiscal authority may become stronger. Keywords: WP; central government; public goods; federal budget; allocative efficiency; monetary union; public expenditure; Economic Union; Policy Coordination; structural adjustment; financing government; common currency; fiscal authority; envisaged EMU fiscal policy framework; government of Europe; EU budget; EMU fiscal policy framework; a number of country; levels of government; Fiscal stabilization; Fiscal governance; Budget planning and preparation; Central and Eastern Europe; Europe; Global (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1998/176 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.