A republican fiscal constitution for the EMU

Abstract

The democratic management of macroeconomic externalities between Members of the Economic and Monetary Union requires abandoning the legal entrenchment of fiscal rules as well as their technocratic administration. The fiscal constitution of the EMU can instead become an instrument that guarantees European citizens’ and peoples’ reciprocal non-domination. This republican goal can be attained once a core set of fiscal principles are agreed upon and later interpreted in a political way by the Council and the European Commission. To be non-dominating the interpretations of these executive bodies on the management of macroeconomic externalities must be subject to a ‘dual contestatory system’. Citizens should not only control, through their national parliaments, what their own governments decide, but also what a collective of governments decide at the EU level. This requires stepping up of the contestatory powers of the European Parliament. Finally, this kind of democratic control should be epistemically supported and facilitated by a network of national Independent Fiscal Institutions who should allow citizens and parliaments to monitor what executives decide both at the national and at the EU level.