Trends in the intergovernmental fiscal relations in the European Union

• Author: Csürös Gabriella
• Position: Faculty of Law - University of Debrecen
• Pages: 72-76

TRENDS IN THE INTERGOVERNMENTAL FISCAL RELATIONS IN THE

EUROPEAN UNION

Gabriella Csürös

Faculty of Law - University of Debrecen

csurosgab@gmail.com

Abstract: The study aims to present the different interpretations of the fiscal federalism and

its connection with the regional policy of the EU – a field which has unfortunately remained

relatively neglected in the legal literature so far. Within the framework of fiscal federalism we are

doing research on the concerning disposal of the Treaty of Lisbon, the main recent preparatory acts

and other documents. With the knowledge of the theory of fiscal federalism we could create a

special systematic, coherent scheme to analyze the regional policy of the European Union.

Key words: Fiscal federalism, intergovernmental fiscal relations, regional policy, financial

framework, Treaty of Lisbon, territorial cohesion, Territorial Agenda, Green Paper of the

Commission, progress reports on economic and social cohesion

The intergovernmental relations and multi-level governance are a popular topic both in the

European and Hungarian researches, mainly in the political and economic studies. One of the

special parts of this field is the system of intergovernmental fiscal relations (or fiscal federalism) – a

field which has unfortunately remained relatively neglected in Hungarian legal literature so far. In a

nutshell, the theory of fiscal federalism focuses primarily on the various functions of state finances

(like allocation, redistribution and stabilization), the roles and governmental levels on which these

functions can be accomplished the most effectively, and finally, the fiscal resources and tools

necessary to successful achievement.

1

In the early stage of the researches concerning the fiscal federalism focused only on the

federal systems and claimed that the distribution and stabilization branches of public fiscal

department must perform their functions primarily at the central-government level. In contrast, in

the allocation branch local government as well as the central government, has important

responsibilities in the provision of needed public goods and services.

2

One of the recent tendencies of fiscal federalism is fiscal decentralisation, examining the

system of financial relations between the various governmental levels in the framework of the

European Union – extending thus the scope of research from intergovernmental fiscal relations of

federal states to the various financial decentralisation processes and instruments (e.g. taxes, aids,

dues) of the member states.

3

This aspect of fiscal federalism has already been discussed in

numerous dissertations related to the topical research of international organisations.

4

With the

acceptance of the European Charter of Local Self-Government, the Council of Europe committed

itself to the research of financing the modernization of exercising public services. In Strasbourg,

under the guidance of the European Committee on Local and Regional Democracy of the Council

1

The connection literature for example: Musgrave, R. A.–Musgrave, P.B. (197 3). Public Finance i n Theory and

Practice. New York: McGraw-Hill. Oates, W. (1972) Fiscal federalism. New York: Harcourt Brace Jovanich.

Oates, W. (1991) Studies in Fiscal Federalism. Aldershot, H ants, England; Brookfield, Vt., USA: E. Elgar.

2

Oates, W. (1968) T he Theory of Public Finance in a Federal System. Canadian Journal of Economic (February 1968),

p. 54.

3

T he connection literature for example: Bosch, N–Durán, J.M. (2008) Fiscal Federalism and Political

Decentralization. Cheltenham, UK; Northampton, MA, USA: E. Elgar. Fossati, A.–Panella, G. (1999) Fiscal

Fedaralism in the European Union. London: Routledge. Rattso, J. (ed.) (1998) Fiscal federalism and state-local

finance: the Scandinavian perspective. Cheltenham, UK; N orthampton, MA, USA: E. Elgar.

4

The connection literature for example Bosch, N–Durán, J.M. (2008) Fi scal Federalism and Political

Decentralization. Cheltenham, UK; Northampton, MA, USA: E. Elgar. Fossati, A.–Panella, G. (1999) Fiscal

Fedaralism in the European Union. London: Routledge. Rattso, J. (ed.) (1998) Fiscal federalism and state-local

finance: the Scandinavian perspective. Cheltenham, UK; N orthampton, MA, USA: E. Elgar.