Impact of fiscal integration on eurozone members (The case of Slovakia)
DOI:
https://doi.org/10.15549/jeecar.v8i1.551Keywords:
fiscal integration, CGE model, euro area, fiscal federalism, sustainabilityAbstract
The eurozone is both a unique project and an unprecedented case in the history of monetary unions. It has the characteristic of a single monetary policy but with sixteen national fiscal policies. The national fiscal policy measures that are aimed at compensating for the absence of a more complete fiscal union have been orientated mainly toward domestic fiscal policy and follow domestic fiscal policy discipline. The aim of the paper is to outline polemical views on fiscal integration, identify potential forms of deeper fiscal integration and simulate its impact on the integration of the Slovak economy using the computable general equilibrium (CGE) model. The collected evidence shows that either deeper fiscal integration taking the form of transfers or a common European tax would be beneficial for the eurozone Member States. Member States would thus have a tool to address unexpected developments in and asymmetric shocks to the eurozone.
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