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The Transformation of Institutions of the European Union Towards a Stronger Common Economic Policy

2012; RELX Group (Netherlands); Linguagem: Inglês

1556-5068

Zoran Sapurik, Ninko Kostovski, Elena Klisarovska,

Global Financial Crisis and Policies

Recent developments in the European Union in the field of economic policy show the need for redefinition of certain aspects of the common activities. The consequences of uncoordinated government spending and fiscal and monetary activities in the member states are evident. It led to large budget deficits in some member states which have caused a range of threats to their macroeconomic stability and to the overall macroeconomic stability of the entire Union. This requires urgent harmonization of the national economic policies if further endangering of the value of the common currency, the euro, is to be avoided. The European Council meeting, in December 2011and in March 2011, recognized the deterioration of the economic and the financial situation in the EU and called for full implementation of the European Union’s New Economic Governance; aiming to increase the confidence in the European economy. The new EU Governance is possible only if common institutions are reformed. The reforms of the EU institutions are expected to yield stronger competencies to influence the implementation of common policies and legislation. The main aim of this paper is to put in the limelight the needs for reforms of the EU institutions for a higher coherence of the common policy to be achieved. The paper focuses on the new Fiscal Treaty of the EU and points out the positive aspects of a fiscal union within the EU. Is also emphasized the positive effect of the 25 member states accepting the Treaty which will lead to stronger position of the EU institutions. The history of EU has been studied, as well as other monetary unions such as that of USA, and it seems that both suffer certain volatility. However, it also seems that the more recent and less economically integrated unions are more volatile then the established ones.