PISM Report: Rebalancing the Fiscal Framework in the European Union: Perspectives of Germany, France and Poland
30 MAR 2017 Report
In recent years, calls have been getting louder for a more expansionary fiscal policy in the euro area. This could happen, for example, by placing an obligation on Member States with space in their budgets to increase spending. If this direction is indeed taken, it can spell gradual but important changes in the integration structure. The euro area, currently focused on enforcing fiscal discipline on the national level, could start turning to joint approaches in stabilisation policy, with the stage open for competences moving to the supranational level. The changes can also influence the pace of euro area expansion if they prove alluring for non-members to ramp up their accession effort. The dynamics of these processes will be contingent mainly on Member State economic preferences. The present report looks into the perspectives on this of Germany and France, whose positions are key for the future of the euro area, and of Poland, one of the weightiest non-members of the monetary union and thus far determined to postpone the decision to join.