What is it about?
This paper shows the impact of EU's deficit-control targets at the local level in Italy. Achieving a budget target at the central level, while neglecting internal rules and how these affect local governments’ financial management, has led to a severe reduction in public investments and to a lack of political accountability.
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Why is it important?
This paper suggests that ignoring the socio-economic effects of fiscal austerity at the local level might increase overall costs in the long run. Therefore, the EU’s policy makers should consider local issues within the domestic settings more seriously and they should not neglect critical situations. To this end, a shared view on what should be meant by “local” would be extremely helpful for Europe in order to adequately deal with deliberate anti-European policies.
Read the Original
This page is a summary of: Deficit control and fiscal austerity in the EU: time to consider the local impact, International Journal of Public Sector Performance Management, January 2016, Inderscience Publishers,
DOI: 10.1504/ijpspm.2016.079717.
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Resources
A maverick Italy risks destabilising the whole EU
Financial Times, 15th October 2018 "...The reform of EU and eurozone governance towards further economic and political integration remains painfully slow and there seems to be no political drive. In an economic area that shares a currency and many common policies, but still has incomplete governance, a democratically elected government can behave like a maverick and produce significant institutional conflict. If it happens in a major country such as Italy, it risks impinging on the stability of the whole area."
Italy wonders where Europe’s solidarity is as coronavirus strains show
Financial Times, 13th March 2020 “It is back to the future, where Italy is left on its own,” said Nathalie Tocci, director of the Institute for International Affairs in Rome. “It was the case with the eurozone crisis, then the migrant crisis of 2015-16 and now the coronavirus crisis. It is the same old story and the political implications could be massive.”
EU-Italy’s compliance with the deficit and debt criteria of the Treaty during COVID-19
Report from the European Commission - Italy Prepared in accordance with Article 126(3) of the Treaty on the Functioning of the European Union
Covid shows that Europe's fiscal rules are outdated
Without a new fiscal regime, the bloc’s economic wounds may take far longer to heal.
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