In 2017, the Bank of Greece commissioned a research project on the “Fiscal Policy of the EU” from the Crisis Observatory. The programme’s duration was from June 15th to December 31st, 2017 and its purpose was to analyse the imminent changes in the context and the governance of the EU fiscal policy. Emphasis was placed on the expected macroeconomic and redistribution impact for Greece and on the possible countermeasures. Scientific supervisor, coordinator and principal author of the final report was Achilleas Mitsos, member of the Board of Directors of ELIAMEP, former Secretary General at the European Commission and Professor of International Ecocomic Relations University of the Aegean. Dimitris Katsikas, Head of the Crisis Observatory also participated in the programme as a researcher.
The rationale of the Project
The overall architecture of the EU is changing. In the near future, a series of developments with significant impact will take place for all member states, especially the Eurozone countries, even if a “leap forward” is not attempted. Fiscal policy, in every aspect, seems to have a key role in this new architecture. Although the often-repeated thesis that there exists no European fiscal policy is not correct, the framework remains incoherent and most importantly not linked to policies with which there are shared objectives (monetary policy, single market and competition policy, social policies). Given the increasing interaction and interdependence of the various policies, the asymmetry on the EU’s fiscal role has been considered as the greatest challenge since the EMU’s creation, whereas the financial crisis has served to confirm these concerns.
The common denominator of all the proposals and thoughts that lie on the table is the strengthened role of the European Union in the member states’ fiscal policy. The greater concession of national fiscal governance to a European level should be considered certain. What is still unknown is the extent of this concession, the type of governance, whether it will be through the establishment of new EU rules for the national fiscal policies or through a direct EU intervention via the EU budget and the decision-making process which largely determines the form and the magnitude of the fiscal policy in the future. Among the typical questions regarding fiscal policy, the question of who carries out the policy and to whom the policy is assigned at the European level has a central position.