The role of the European Fiscal Board in the EU fiscal system

• Main Author: Golubović Srđan
• Format: Article
• Language: English
• Published: Faculty of Law, Niš 2019-01-01
• Series: Zbornik Radova Pravnog Fakulteta u Nišu
• Subjects: economic and monetary union; fiscal policy coordination; european fiscal board; fiscal union
• Online Access: https://scindeks-clanci.ceon.rs/data/pdf/0350-8501/2019/0350-85011984015G.pdf
• ISSN: 0350-8501; 2560-3116

The financial crisis, which culminated in the course of 2008, revealed all the shortcomings of the institutional framework of the European Economic and Monetary Union. The only exception are institutional solutions in the monetary sphere (the single currency, the legal status and tasks of the European Central Bank), which proved to be functional during the crisis. However, other elements of the institutional infrastructure, important for the functioning of the economic and monetary union, have demonstrated significant weaknesses, which affected the onset and depth of the crisis in the European Union. Certainly, fiscal institutions are the weakest link of the economic and monetary union. Attempts at monetary unification, while retaining the fiscal autonomy of the member states, failed. Contrary to expectations, member states failed to preserve fiscal discipline, nor did the institutions of the Union succeed in ensuring compliance with established fiscal rules (above all, the rule of prohibiting the takeover of debts by member states, that is, compliance with the rules related to the level of indebtedness and the level of the budget deficit). The distorted credibility of fiscal institutions pointed to the necessity of developing common fiscal governance framework in the European Union. Initiated by signing of the Treaty on Stabilization, Coordination and Governance Agreement in the Economic and Monetary Union in 2012, this process led to the creation of the European Fiscal Board, as an independent advisory body aimed at assisting the European Commission in coordinating member states' fiscal policies. Taking into account the need for fiscal integration, as a prerequisite for the functioning economic and monetary union, the paper analyzes the position of the European Fiscal Board and its role in the fiscal system of the European Union.