Reference : Nein to ‘Transfer Union’: the German brake on the construction of a European Union fi...
Scientific journals : Article
Law, criminology & political science : Political science, public administration & international relations
Nein to ‘Transfer Union’: the German brake on the construction of a European Union fiscal capacity
Howarth, David mailto [University of Luxembourg > Faculty of Humanities, Education and Social Sciences (FHSE) > Department of Social Sciences (DSOC) >]
Schild, Joachim mailto []
Journal of European Integration
Yes (verified by ORBilu)
United Kingdom
[en] Core state power ; Germany ; fiscal capacity ; Eurobonds ; European Stability Mechanism ; Covid-19 ; Next Generation EU
[en] This paper argues that, on the development of European Union (EU)/Eurozone fiscal capacity German governments have consistently engaged in foot-dragging. Few German state elites have ever supported European fiscal capacity building beyond the EC budget. Following the outbreak of the Eurozone sovereign debt crisis, German governments agreed to the creation of financial support mechanisms only with reluctance. We see a case of continuity in German policy preferences driven by consistent ordoliberal and, specifically, moral hazard concerns. The important longterm change that we can observe relates to the growing importance for successive governments of avoiding audience costs driven by sceptical public opinion and the rise of a challenger party in German politics. German government support for a massive EU fiscal response to the economic crisis triggered by the COVID-19 pandemic demonstrates an exceptional policy position in favour of temporary financial mechanisms involving no fiscal transfers among member state governments.
Researchers ; Professionals ; Students ; General public

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