Why the sovereign debt crisis could lead to a federal fiscal union: the paradoxical origins of fiscalization in the United States and insights for the European Union

Woźniakowski, Tomasz P.

doi:10.1080/13501763.2017.1285340

Cited by 21 publications

(2 citation statements)

References 29 publications

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“…On the contrary, the two instruments of fiscal integration are dependent on the MSs if the intergovernmental institutions (the Council and the European Council) are the key decision-makers. Starting from the upper left cell, the autonomous revenue capacity results from the process Woźniakowski (2018) coined "fiscalization" which leads to central tax capacity. Hence, for us, revenue capacity is autonomous if the centre finances itself only or mainly through independent resources in the form of taxes.…”

Section: Eu's Fiscal Patternsmentioning

confidence: 99%

Comparative Fiscal Federalism and the Post‐Covid EU: Between Debt Rules and Borrowing Power

Woźniakowski,

Zgaga,

Fabbrini

2023

PaG

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This thematic issue examines two main research questions: What are the features, the determinants, and the implications of fiscal integration in a system of multilevel governance like the EU? And, what can the post-pandemic EU learn from established federations when it comes to fiscal integration? We attempt to conceptualize the patterns of EU fiscal integration. In so doing, we identify eight instruments of fiscal integration in a federal or multilevel polity, equally divided between fiscal capacity and fiscal regulation, depending on the side of the budget and the mode of integration (autonomous or dependent). For instance, as part of the fiscal capacity instrument of integration, we propose to distinguish between revenue and expenditure capacity. Revenue capacity is then further divided into tax capacity, based on EU/federal taxes, and budgetary capacity, based on non-independent sources, for instance, contributions from the member states. Expenditure capacity is divided into autonomous spending capacity, meaning direct spending by the EU, and a dependent transfer capacity, where the EU merely distributes resources (both grants and loans) to the member states.

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Section: Eu's Fiscal Patternsmentioning

confidence: 99%

Comparative Fiscal Federalism and the Post‐Covid EU: Between Debt Rules and Borrowing Power

Woźniakowski,

Zgaga,

Fabbrini

2023

PaG

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“…Many scholars used federalism to examine the developments of the EU (e.g., S. Fabbrini, 2017;Schütze, 2009), and some have compared the EU to the early US history, focusing mainly on the policies conducted by Alexander Hamilton (Gaspar, 2015;Henning & Kessler, 2012;Steinbach, 2015), although a few focused on the period when the fiscal structure of the US resembled the EU-the pre-Constitution US (see Georgiou, 2022, pp. 142-143;Sargent, 2012;Woźniakowski, 2018Woźniakowski, , 2023. Equally, the EU fiscal response to the Covid-19 pandemic, the Next Generation EU (NGEU) has attracted scholarly attention since its inception and has been analyzed from many perspectives, including its legal nature (De Witte, 2021;F.…”

Section: Introductionmentioning

confidence: 99%

No Borrowing Without Taxing? Fiscal Solidarity of Next Generation EU in Light of the American Experience

Woźniakowski

2023

PaG

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This article argues that the EU response to the pandemic, the Next Generation EU (NGEU), dubbed a “Hamiltonian moment” for Europe, can be better understood if compared to the US under the Articles of Confederation. The key aspect of the original Hamiltonian moment was the assumption of states’ debts after the Union was given tax power. None of this happened with the NGEU. The EU was not given any significant new sources of revenue, apart from some environmental levies, and was only allowed to borrow more on the financial markets to finance new fiscal solidarity mechanisms. In the US, this kind of borrowing power gave rise to monetary financing of the debt and enormous inflation. Instead of backing the enlarged borrowing powers with a fiscalization process leading to tax powers, the EU created a hybrid system of temporary, limited quasi-fiscalization in the form of the NGEU, which has legitimacy gaps. Simultaneously, the EU introduced enhanced fiscal regulation with conditionalities in the form of the new European Semester (an annual EU cycle of economic and fiscal coordination) tied to the allocation of the NGEU funds. Additionally, the EU has only promised to work in the future on various forms of revenue needed to pay the new debt. Hence, I will show that the NGEU could be better described as a “Morrisian moment” for Europe, as Robert Morris, the superintendent of finance of the US (1781–1784), was the very first finance minister of a similar kind of a union, with the power to borrow but no power to tax, governed by the unanimity rule in fiscal matters, which led to the failure of his proposals for national revenue.

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European Fiscal and Debt Union

Bednář

2023

Contributions to Finance and Accounting

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Why the sovereign debt crisis could lead to a federal fiscal union: the paradoxical origins of fiscalization in the United States and insights for the European Union

Cited by 21 publications

References 29 publications

Comparative Fiscal Federalism and the Post‐Covid EU: Between Debt Rules and Borrowing Power

Comparative Fiscal Federalism and the Post‐Covid EU: Between Debt Rules and Borrowing Power

No Borrowing Without Taxing? Fiscal Solidarity of Next Generation EU in Light of the American Experience

European Fiscal and Debt Union

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