Europe’s Empty Fiscal Compact
The EU’s current focus on creating a “fiscal compact,” which would bind member states to supposedly inviolable deficit ceilings, reflects the “European project” of political integration. Unfortunately, the proposed compact subordinates economic reality to political leaders’ desire for bragging rights about progress toward “ever closer union.”
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CAMBRIDGE – The driving force of Europe’s economic policy is the “European project” of political integration. That goal is reflected in the European Union’s current focus on creating a “fiscal compact,” which would constitutionalize member states’ commitment to supposedly inviolable deficit ceilings. Unfortunately, the compact is likely to be another example of Europe’s subordination of economic reality to politicians’ desire for bragging rights about progress toward “ever closer union.”