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Who Owns the Eurozone? The political economy of fiscal rules and the European Fiscal Framework

Fiscal policy is all about power – the power to tax, to borrow and to spend. In the Eurozone, the exercise of this power is calibrated against a complex fiscal framework and a plethora of formal rules. Some, therefore, argue that the design of the Eurozone’s fiscal framework and rules significantly constrain nationally elected policymakers, particularly during crises.

Others suggest that the fiscal framework and rules are less important, and what matters is how fiscal policy is actually implemented. This suggests that the framework’s design, but more so its enforcement and actual effects on national policies reflect distributions of power.

Who actually determines the rules and decides on their enforcement? Under which conditions can Eurozone members maintain relative autonomy, and when does power shift to Brussels and/or Frankfurt? Which groups in society benefit/suffer from the design and implementation of the European Fiscal Framework? How should the framework be reformed to make Europe’s economies more resilient? Taking a political economy lens, this event seeks to answer some of these questions and more.

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  • Vitor Constancio (Former Vice President, ECB)
  • Lucio Baccaro (Director Max-Planck-Institut für Gesellschaftsforschung)
  • Waltraud Schelkle (Professor in Political Economy, LSE)
  • Poul Thomsen (Former Director of the European Department of the IMF)
  • Benedicta Marzinotto (Adjunct Professor of Economic Policy at SAIS Europe)
NEF & Max Planck Institute
28 Sep