Servicenavigation
Abstract
The EU’s fiscal governance framework was built to contribute to overall macroeconomic stability through compliance with fiscal rules and the commitment not to bail-out countries in trouble. Yet successive crises have revealed vulnerabilities under systemic stress: countries with a propensity to run deficits push frugal ones into ex-post bail-out arrangements to avert collapse, thus undermining the ex-ante credibility of the framework. The absence of a permanent, preventive instrument forces the Union to oscillate between leniency and emergency intervention. A permanent RRF-like mechanism - linking EU funds to reform and investment projects - offers a structural solution.