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The Scope for a Budgetary Union in the European Monetary Union

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The Euro and the Crisis

Part of the book series: Financial and Monetary Policy Studies ((FMPS,volume 43))

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Abstract

In the scenario of the Economic and Monetary Union of the European Union (EU), where the EU budget is not able to play the role of a centralized fiscal policy instrument, proposals for a budgetary union have been widely discussed. As a contribution to the debate, in this chapter we will discuss the macroeconomics of a monetary union focusing our analysis on the scope for coordination of budgetary policies. When using the public deficit as policy instrument, we will identify the full cooperation of fiscal policies with a budgetary or fiscal union. The results will allow us to explore the role that fiscal integration can play in reducing the incidence and severity of future crises, and will also allow us to derive under which circumstances a budgetary union would not be advisable. In particular, we will show to which extent a fully coordinated fiscal performance of the Eurozone’s members should be complemented with fiscal discipline, a zone-wide system of transfers, or an automatic mechanism to ensure the stability of the Eurozone.

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Authors and Affiliations

  1. Facultad de Derecho y Ciencias Sociales, Universidad de Castilla-La Mancha, Ronda de Toledo, s/n, 13071, Ciudad Real, Spain

    Oscar Bajo-Rubio & Carmen Díaz-Roldán

Authors
  1. Oscar Bajo-Rubio
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  2. Carmen Díaz-Roldán
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Corresponding author

Correspondence to Oscar Bajo-Rubio .

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Editors and Affiliations

  1. CIDEEFF - School of Law, University of Lisbon, Alameda da Universidade, Lisbon, Portugal

    Nazaré da Costa Cabral

  2. CIDEEFF - School of Law, University of Lisbon, Alameda da Universidade, Lisbon, Portugal

    José Renato Gonçalves

  3. CIDEEFF - School of Law, University of Lisbon, Alameda da Universidade, Lisbon, Portugal

    Nuno Cunha Rodrigues

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Bajo-Rubio, O., Díaz-Roldán, C. (2017). The Scope for a Budgetary Union in the European Monetary Union. In: da Costa Cabral, N., Gonçalves, J., Cunha Rodrigues, N. (eds) The Euro and the Crisis. Financial and Monetary Policy Studies, vol 43. Springer, Cham. https://doi.org/10.1007/978-3-319-45710-9_21

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