Even almost 25 years after the founding of the monetary union, the attempts to coordinate the (each national) financial policy of the euro states are largely ineffective.
Image: dpa
The monetary policy of the ECB moves the markets. On the other hand, no one was interested in the fact that the euro finance ministers also announced a return to fiscal policy normality. No wonder, since everyone understands something different by it.
AWhen the European Central Bank announced its return to normal monetary policy a few weeks ago, the financial markets reacted very nervously. Some observers already saw the return of the euro crisis. When the euro finance ministers also announced a return to normality this week, this time with regard to fiscal policy, nobody was interested, neither in the markets nor elsewhere. It doesn’t matter whether the ministers describe their current fiscal policy orientation as expansive, restrictive or neutral, because everyone can understand it differently.
Even almost 25 years after the founding of the monetary union, the attempts to coordinate the (each national) financial policy of the euro states are largely ineffective. In an emergency, each country decides for itself whether or not to take on new debt. This is a result of the fact that the budget right of the national parliaments can still be considered their “royal right”. But it also means that only monetary policy is able to influence the economy of the entire euro zone, with very different results depending on the member state. The fiscal policy instrument originally intended for the EU to influence the member states via the rules of the Stability Pact and to sanction violations of them has long since been abandoned.
