Fiscal union

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A fiscal union is the common fiscal policy within a federal state or several countries. A fiscal union has common institutions that are empowered to operate fiscal policy by influencing taxes and government spending and thus, for example, to compensate for regional and economic fluctuations. The corresponding contractual agreement is called the “Fiscal Compact”.

European fiscal union

Fiscal Pact and current account .

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→ Main article : European Fiscal Compact

At the Brussels summit to solve the euro crisis , the euro countries and eight other EU countries decided on the night of December 9, 2011 to expand the European Economic and Monetary Union (EMU) into a fiscal union that, among other things, includes a debt brake and automatic sanctions for "Household sinners" provides. The United Kingdom and the Czech Republic are the only EU members who do not want to join the fiscal union. The UK and Denmark have a special role within the EMU, as they in 1992 Maastricht Treaty an exemption ( " opt-out ") have agreed. This releases both countries from the obligation to introduce the euro.

A common fiscal and debt policy is not without controversy among economists in terms of their possible consequences. The economist Heiner Flassbeck says: “If private households and companies are already spending too little money to keep the economy running, a state that is even more economically efficient than before can apparently only cause mischief because it brings the economy to a crash. If Germany and France convince the other 15 euro countries to do the same, the crash will come very quickly. "

Paradoxical Interventions

On the one hand, it has been clear to the IMF since 2003 at the latest that fiscal adjustment programs often do more harm than good. On the other hand, Olivier Blanchard (IMF chief economist) declared on January 1, 2013, the day the European Fiscal Compact came into force , that he had miscalculated when calculating the fiscal multiplier. The Advisory Council on the Assessment of Overall Economic Development explains: “In 2012 there was an unexpectedly sharp economic slump in the problem countries. In September 2011, the International Monetary Fund (IMF) expected a positive development in its forecast for economic growth in Italy and Spain in 2012. ”And that despite the energetic austerity programs none of the problem countries managed to increase their debt ratio further in 2012 to avoid. The reasons given are that the clear economic slowdown wiped out a significant part of the planned savings, as tax revenues developed less favorably than expected and additional government expenditure became necessary, in particular due to rising unemployment. It is also explained that in addition to the problem countries of the monetary union, Belgium, Finland, Slovenia and Cyprus are also facing a noticeable economic slowdown. On January 11, 2013, EU Economic and Monetary Affairs Commissioner Olli Rehn declared that budget budgets will continue to be cut. In November 2013, the European Parliament doubts the sense of the coercive measures imposed by the Troika against Greece: Martin Schulz now publicly criticizes that the Troika "did more damage than good."

Competitiveness Pact

At the 2013 annual meeting of the World Economic Forum on January 24, 2013 in Davos, Angela Merkel spoke about a “Pact for Competitiveness” being considered in the European Union in order to improve the competitiveness of nation states, and stated that it was often about things how additional wage costs , unit labor costs , infrastructures will go. The economic policy measure of lowering unit labor costs (and thus lowering the total wage bill and lowering aggregate domestic demand) in order to increase competitiveness is not without controversy among economists: for example, the development of relative unit labor costs in British industry in the 1980s was by no means how one should expect, according to current argumentation, to be accompanied by a favorable development in employment, production and exports. (Forced) privatization of state infrastructures of dependent, indebted states is an often criticized structural program of the IMF and the World Bank.

Budget monitoring and central government budget

From January 1, 2014, all those EU states that participate in the Fiscal Compact (Treaty on Stability, Coordination and Governance in the Economic and Monetary Union) and have not met the criteria by then must submit their budget to the EU Commission and the EU Council to get approved. With regard to its ultimate goal of fiscal and economic union, the European Commission states as follows: “The creation of a political union with a suitable pooling of sovereign rights, with its own fiscal capacity in the form of a central budget and its own mechanisms that it determines precisely defined prerequisites allow budgetary and economic policy decisions to be implemented by their members. "

literature

• Theresia Theurl : A common currency for Europe. 12 lessons from history (= history & economics 1). Österreichischer Studien-Verlag, Innsbruck 1992, ISBN 3-901160-05-1

Web links

• Die Welt, January 21, 2013: You are rid of the British in a fiscal union . Retrieved on February 2, 2013.

Individual evidence

1. ↑ See declaration by the heads of state and government of the euro currency area ( memento of the original dated December 10, 2011 in the Internet Archive ) Info: The archive link was automatically inserted and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF; 130 kB), published by the European Council, December 9, 2011 
2. ↑ Heiner Flassbeck: Only fools believe in the debt crisis. (Guest article: Badische Zeitung of August 24, 2011) Retrieved on December 1, 2012.
3. ↑ IMF, 2003: Evaluation report on 133 fiscal adjustment programs that were enacted by states between 1993 and 2001 (PDF, 124 p .; 536 kB). Retrieved on February 2, 2013.
4. ↑ Fabian Lindner, January 7, 2013: The IMF knew better all along. Retrieved February 2, 2013.
5. ↑ Jens Berger, January 10, 2013: The mistake of the euro saviors and the silence in the forest of leaves. Retrieved February 2, 2013.
6. ↑ German Bundestag, November 12, 2012: Information to the German Federal Government: Annual report 2012/13 of the Council of Experts on the Assessment of Macroeconomic Development (PDF, pp. 70–71; 6.1 MB) Retrieved on February 2, 2013.
7. ↑ Reuters, January 11, 2013: Budget cuts must go on, EU's Rehn says. Accessed February 2, 2013.
8. ^ Badische Zeitung, November 7, 2013: Examiners become examiners
9. ↑ Speech by Chancellor Merkel at the 2013 annual meeting of the World Economic Forum ( Memento of the original from October 27, 2013 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. Retrieved February 2, 2013.  
10. ^ Wilhelm Lautenbach: Interest, credit and production. ( Memento of the original from October 17, 2013 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. (PDF) p. 95: Whether and to what extent the banknotes in circulation will increase depends less on the size of the loans taken out by the public sector than on the economic success of the state's financial and economic management, as the considerations show and experience confirms from. Employment and wages are the deciding factors. In the upswing, the process observed in the downswing is reversed. Just as the decrease in the total wage bill reduces the circulation of cash in the depression, so the increase in the total wages bill increases it in the upswing. Unless the wage rate increases, the amount of cash in circulation can increase little. The development since 1933 confirms this. (1936/1937) PDF accessed on February 3, 2013. 
    
11. ↑ Austrian Institute for Economic Research: Wolfgang Pollan: Unit labor costs as a key figure for competitiveness (PDF) p. 5. Accessed on February 2, 2013.
12. ↑ Joseph Stiglitz: The shadows of globalization.  ( Page no longer available , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice. (PDF, excerpt; 19 kB) Retrieved on February 2, 2013.  
13. ↑ EU Commission, November 28, 2012: A Concept for a Deeper and Real Economic and Monetary Union (PDF, p. 36, 3.3.2; 351 kB) Retrieved on February 2, 2013.