Research Papers

With the creation of the single market and the introduction of the European Monetary Union, economic integration in the EU has gone way ahead of political integration. It was expected that political integration, i.e., the establishment of a common polity that provides an effective institutional framework complementing economic integration, would follow as a necessary consequence from economic integration. However, the EU is still far away from a comprehensive Political Union with financial transfers and fiscal means that could stabilize and steer the common market. Despite many efforts, the heads of State did not amend the Treaties toward the creation of a federal fiscal structure. This paper explores why. After discussing how economic integration constrains national tax policy-making, the paper investigates empirically the proposals for a European fiscal competence at the Intergovernmental Conferences since Maastricht by focusing on the preferences of the Member States in those negotiations.