The overall architecture of the EU is changing. In the near future, a series of developments with significant impact will take place for all member states, especially the Eurozone countries, even if a “leap forward” is not attempted. Fiscal policy, in every aspect, seems to have a key role in this new architecture. Although the often repeated thesis that there exists no European fiscal policy is not correct, the framework remains incoherent and most importantly not linked to policies with which there are shared objectives (monetary policy, single market and competition policy, social policies). Given the increasing interaction and interdependence of the various policies, the asymmetry on the EU’s fiscal role has been considered as the greatest challenge since the EMU’s creation, whereas the financial crisis has served to confirm these concerns.

The common denominator of all the proposals and thoughts that lie on the table, is the strengthened role of the European Union in the member states’ fiscal policy. The greater concession of national fiscal governance to a European level should be considered certain. What is still unknown is the extent of this concession, the type of governance, whether it will be through the establishment on new EU rules for the national fiscal policies or through a direct EU intervention via the EU budget, and the decision making process which largely determines the form and the magnitude of the fiscal policy in the future. Among the typical questions regarding fiscal policy, the question of who carries out the policy and to whom the policy is assigned at the European level, has a central position.

The purpose of this study is to analyse the forthcoming changes regarding the context and the governance of the EU fiscal policy. The emphasis will be on the expected macroeconomic and redistribution impact for Greece and on possible countermeasures.

The Crisis Observatory was assigned the research project “The Fiscal Policy if the EU” by the Bank of Greece.