Article (Scientific journals)
Nein to ‘Transfer Union’: the German brake on the construction of a European Union fiscal capacity
Howarth, David; Schild, Joachim
2021In Journal of European Integration, 43 (2), p. 207-224
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Keywords :
Core state power; Germany; fiscal capacity; Eurobonds; European Stability Mechanism; Covid-19; Next Generation EU
Abstract :
[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.
Disciplines :
Political science, public administration & international relations
Author, co-author :
Howarth, David  ;  University of Luxembourg > Faculty of Humanities, Education and Social Sciences (FHSE) > Department of Social Sciences (DSOC)
Schild, Joachim
External co-authors :
Language :
Title :
Nein to ‘Transfer Union’: the German brake on the construction of a European Union fiscal capacity
Publication date :
February 2021
Journal title :
Journal of European Integration
Publisher :
Routledge, United Kingdom
Volume :
Issue :
Pages :
Peer reviewed :
Peer Reviewed verified by ORBi
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since 22 February 2021


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