Global Analysis from the European Perspective. Preparing for the world of tomorrow

After the Brexit Referendum, a Fiscal Union Will be Brussels’ Surprise

The process of drawing up a joint EU budget has just commenced: it is the first step to a fiscal union. The idea of having a joint budget has long been pushed forward by the proponents of a more tight integration, just as it has been opposed by the European population at large. The term budgetary or fiscal capacity should be properly understood: it is a joint budget for the eurozone that will be governed by a real treasury in Brussels. To create a collective treasury, Europe’s social and economical model has to be brought in line. For this, Brussels wants all minimum wages to be equal. Martin Schulz, the President of the European Parliament, announced drastic reforms after the Brexit referendum. Following 23 June the aforementioned process of integration will gain momentum and it is likely to encounter upheavals because there is widespread aversion to federalization.

DRAFT REPORT on budgetary capacity for the Eurozone, European Parliament, 2016-05-04

A budgetary capacity for the Eurozone: joint committee debate – 30.05.16, 
The draft report, which aims at sending a strong political message to Council and Commission ahead of a white paper expected next year, identifies three functions for a fiscal capacity: convergence, absorption of asymmetrical and of symmetrical shocks.Source: European Parliament 2016-05-24

Martin Schulz: ‘The European Union is in a dismal state’ 
Unfortunately no. I think one of the problems of the euro zone is this macro-economic imbalance – in our jargon that means very uneven development within the euro zone. We must fix that, whether Britain stays or leaves. But I think if it left, that would force the other member states to realize: now is the time to act. And in any case, after June 23, we’ll need to discuss the future structure of the European Union.” Source: Global Conversation

A budgetary capacity for the euro area, 
Introductory remarks by Benoît Cœuré, Member of the Executive Board of the ECB, at a public hearing at the European Parliament, Brussels, 2 March 2016. Source ECB 2016-03-02

Moving towards a fiscal capacity for the euro area, 
The idea that the euro area needs a common “fiscal capacity” has gained ground since the publication of the Van Rompuy report in 2012. Source: EuVisions 2016-04-14

The eurozone is in urgent need of a fiscal capacity. The euro management profits should directly revert back to reinforce the Monetary Union, say S&Ds, 
S&D Euro MPs want to use a portion of the millions of euros made in profits by the European Central Bank (ECB) as a financial resource for the eurozone. Source: S&D 2016-02-24

My priorities, Jean-Claude Juncker, 
In this context, a targeted fiscal capacity at Eurozone level could be developed to work as a shock-absorber, if needed. Source:

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

GEFIRA provides in-depth and comprehensive analysis of and valuable insight into current events that investors, financial planners and politicians need to know to anticipate the world of tomorrow; it is intended for professional and non-professional readers.

Yearly subscription: 10 issues for €225/$250
Renewal: €160/$175

The Gefira bulletin is available in ENGLISH, GERMAN and SPANISH.