Abstract
This paper aims at studying the legal aspects of the European Union (EU)’s fiscal policy, analyzing the statute of fiscal responsibility legal framework, the different measures undertaken in the last years with respect to European trends in fiscal governance and their implications for challenges in public finance sustainability. The research started from the presupposition that there is a lack of mechanisms capable of enforcing the area of public finance sustainability, and the implication of the events that created the economic conjuncture of recent years reveals that the solidity of public finances has reached an impasse and needs to be enhanced. The analyzed documents from the area of fiscal responsibility show formal respect for the legislative framework aimed at consolidating public finance sustainability and accentuate the need to use fiscal laws, independent institutions and mechanisms that put constraints on policymakers and determine them to spend more efficiently, invest more wisely, and obtain better results regarding public finance sustainability. We conclude that future policymaking processes need to consider the consolidation of independent fiscal institutions founded by Fiscal Responsibility Law framework, completed by fiscal rules and, therefore, need to redesign the fiscal risk management process.
Highlights
The domain of fiscal responsibility is an area of profound lack in terms of positive experiences regarding the accountability of policymakers’ decisions and a field for experiencing the new public management style and the design of mechanisms for coordinating fiscal policy in the European Union (EU) and the entire world
As the paper aims at studying the legal aspects of EU fiscal policy, by analyzing the statute of fiscal responsibility legal framework with respect to different measures imposed in the last years by EU fiscal governance, we first approach the literature which addresses the topics of fiscal responsibility laws and challenges of Public Finance Sustainability in the EU and we have done our analyses by identifying the key definitions, concepts, advantages and disadvantages of each of the topics
Given the fact that the current research seeks to strengthen the overall picture of the fiscal responsibility legal framework at the EU level, and to corroborate the implications for challenges in public finance sustainability, we have started from some basic ideas, precisely by setting up judgments to lay the foundations of the research object
Summary
The domain of fiscal responsibility is an area of profound lack in terms of positive experiences regarding the accountability of policymakers’ decisions and a field for experiencing the new public management style and the design of mechanisms for coordinating fiscal policy in the European Union (EU) and the entire world. Based on governments’ behavior from the last years, the search for mechanisms to escape from fiscal populism has intensified This is a strategy usually used for winning elections or retaining public office and a mechanism built to strengthen a new framework to maintain the sustainability of public finances. This activity leads to the enforcement of fiscal responsibility laws (FRL) legislation. The first objective of our paper is to identify a possible statute of FRLs at the EU level, by analyzing the existent legal framework, recent modification, and existing correlation with the public finance sustainability. We are interested in identifying the evolution of adopted fiscal rules, analyzing countries that have implemented particular fiscal rules during the last 15 years and comparing their legal framework with respect to the recommendation of the Fiscal Councils
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