Abstract:

National fiscal policies are a matter of critical significance in a common currency area comprised of independent states. In the EU, numerical fiscal rules have been put in place in order to insure national fiscal policies compatible with the common currency. Independent national organizations – fiscal boards – have been created to advise national policymakers on fiscal issues. An initiative of the EU leadership has been the set up of an advisory European Fiscal Board to coordinate and complement the activity of national fiscal boards. In this context, this article analyzes a recent proposal to assign the European Fiscal Board the task to make binding fiscal decisions. Building on the democratic deficit line of argument and on some insights of the theory of bureaucratic behavior, we suggest that this organization would be perceived as undemocratic as it would tend to accumulate more power due to information asymmetry. Moreover, the data that the board uses in its operation would be a matter of increased controversy.