Abstract
There is no clear-cut evidence on how the adoption of the European fi scal standards influences discretionary fi scal policies within the Member States. This study investigates that phenomenon on the example of the 2004 enlargement. The results show that the e ffects of the adoption of EU fiscal rules bring a statistically signifi cant change towards more counter-cyclical behavior. The results are robust for di fferent model specifi cations, including alternative time spans and correcting for the possible influence of the fi nancial crises and political forces. Interestingly, the year 2004 did not have any signifi cant impact on the change in fi scal policies in the Old Member States, suggesting that the EU entry might motivate new members to run more prudent budgetary policies.
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