LEGITIMACY AND FUNDAMENTAL OF EUROPEAN FISCAL POLICY
LEGITIMACY AND FUNDAMENTAL OF EUROPEAN FISCAL POLICY

Summary/Abstract: European Union, characterized by a high degree of economic integration, the single currency and free movement of goods, services, persons and capital, faces unresolved issue of national sovereignty of fiscal policy. Fiscal policies were, historically, developed primarily to address internal economic problems and domestic social concerns. Reviewing the literature, this paper determines the sources of legitimacy and foundations of European fiscal policy, analyzing three models: the legitimacy of externalities model, the community sources of legitimacy model and the political rights based on legitimacy model. The analysis results lead to the following conclusion: exclusive use of a single model of the three presented in the article, prevent designing a coherent European fiscal policy and just approaching democratic legitimacy at the European level can progress in fiscal policy, even after a model of fiscal federalism.

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