The Demise and Reform of the European Union’s Stability and Growth Pact
Edited by Lelia Simona Talani and Bernard Casey
Conclusions: The Demise and Reform of the SGP and the Future of EMU: Towards the Disruption of the European Integration Process?
Leila Simona Talani This book focused on the future of the monetary union in relation to the fate of its ﬁscal constraints as enshrined in the European Union’s Stability and Growth Pact. The book has oﬀered an interdisciplinary perspective: by its nature the ﬁscal governance of a single currency area includes interrelated economic and political dimensions. Reacting to national and/or international economic developments, economists have oﬀered a variety of prescriptions designed to enhance ﬁscal cooperation within the Euro-zone. From an economic point of view, the reforms of the SGP deeply modiﬁed its original philosophy, norms and practices. The reforms of the SGP were enacted in the context of deteriorating ﬁscal conditions; uneven economic growth; vast discrepancies in the scope and extent of structural reforms, especially in the area of labour and pensions; and the changed circumstances of the enlarged EU. They need to be assessed within this context. Because they make greater allowance for the heterogeneity of member states and permit more discretion in the application of the ﬁscal rule, they enhance credibility, increase ﬂexibility, and elicit greater legitimacy through a clearer economic rationale which leaves more scope for judgement to allow for country-speciﬁc circumstances. Hence, the member states must meet the challenge of implementing the new SGP. As Woods argues (Chapter 5), the capacity of the new SGP to be eﬀective depends largely on the ability of the member states of the Eurozone to develop complementary national ﬁscal frameworks and promote structural reforms. Artis...
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