Enhancing Stability and Compliance in the Eurozone by Fiscal Policy Measures

Since the 2008 financial crisis and 2012 European sovereign debt crises debates about the actions taken by Member States of the European Union (EU) and the EU itself have become much more important and contested in policy circles and among the public. European institutions addressed tensions existing in the Eurozone by several legislation packages. These actions included European monetary measures (taken by the European Central Bank) and national fiscal policies, which aimed to increase the stability in the Eurozone. The fiscal and monetary policies are complementary to each other in restoring stability in the Eurozone. The European monetary policies triggered conflicts about the competencies of the European institutions (e.g. the contradicting rulings of the German Federal Constitutional Court (FCC) and the Court of Justice of the European Union (CJEU)). National fiscal policies, highly important during these crises, became a subject of focus of the European Commission, as it introduced and implemented a review of national budget plans 2013. This legislation was necessary due to the higher potential for spillover effects of budgetary policies in the European Union and the need for stronger mechanisms designed specifically for the Euro area.