Eurozone-crisis management in neofunctionalist framework – A European Fiscal Union?

Abstract

The global economic crisis of 2008-2009 and its negative consequences had a serious impact on the Economic and Monetary Union (EMU). As a result of the crisis, the break-up of the Euro Area became a real threat in the European Union (EU). Therefore, member states finally decided to launch significant reforms with the primary aim of strengthening the European Economic Governance (EEG). Given that the original architecture of the EMU had rather been asymmetric, it seemed obvious to focus – inter alia – on the fiscal side of the integration. The reform of the EEG is an important issue from theoretical perspective as well, because it projects the transformation of the EMU’s structure and – in the long run – the deepening of the EU. The aim of the paper is to provide a general overview on the current debates of the possibility of a European Fiscal Union (EFU). Furthermore, the study raises the issue of a larger budget and a European tax which would probably be the most powerful element of a European Fiscal Union. The paper examines the issue of the EFU in neofunctionalist framework and argues that this theory has a relevance in explaining the Eurozone-crisis management in the long term.