A myopic economic constitution? : controlling the debt and the deficit without fiscal integration

Abstract

This paper assesses the actual implications that the current budgetary supervision legal framework (both in the EU Law and Member States) has had on the Economic Constitution. Although there are tangible implications for all EU Member States, and the EU as a whole, in this paper I will mainly focus in the Euro Area, where budgetary discipline rules have greater consequences. Budgetary discipline rules do not automatically entail austerity measures or undermine the powers of Parliaments, at least in theory. They have however probably had a crowding-out effect for the construction of a (real) economic union, in that measures to construct fiscal capacity and tax integration to discuss public spending or to attain a real banking union (to name just a few) have been watered down if not abandoned outright.