Ekonomikos referatas. Abstract. Advantages and disadvantages. The Premises for the Fiscal Union in Europe. Tax reforms. Conclusion. Refferences.
Fiscal Union is composed of individual countries or states which share the same common budget. It is created by many elements and mechanism to improve Fiscal Union members growth. One of the most important - a central fiscal authority, which is responsible for union spending decisions, tax levels creating and developing general rules for conveners of Fiscal Union. To exclude advantages and disadvantages of Fiscal Union, go deep into tax reform and analyse premises for the Fiscal Union it is important to introduce main possible elements of Fiscal Union:
Fiscal Rules, policy coordination and supervision. A set of rules helps create stability and growth pact. Together with this rules we have supervision mechanism, which make changes and create reforms, decisions to develop system.
A Crisis resolution mechanism. Find ways how crises can be dealt with and reduce risk of recessions. Helps to find objections to let countries restructure their debt if it becomes unsustainable. Each country can apply for support if there is a danger to face serious financial difficulties and lose access to private capital markets.
Mechanism for transfers between countries or states. Developing and creating explicit transfer mechanism of significant magnitude between countries. Insurance of financial transfers to countries need to be provided to avoid effects of asynmetric negative macroeconomic shocks. It can be done by creating a fiscal equalisation scheme.