The global crisis left a number of European states in an economic recession with a huge national debt where countries like Greece was close to declare state bankruptcy. The European Union was aware of the economic dependence between the European countries and that member states with an undisciplined economic policy could influence other member state’s national economy. As a result of the global crisis came the fiscal pact as a treaty between 25 member states which was an addition to the requirements of economic control by EMU. The fiscal pacts requirements was maybe necessary in contrast to the member states of the European Union but regarding a normative way of understanding democracy, politicians should be able to pursue the policy they are elected to represent. Consequently it could be a problem if a politician’s political options are reduced. That is why we want to seek out how the fiscal pact is challenging the Danish national and municipal politician’s opportunities to pursue fiscal policy. It led us to the research question: How does the fiscal pact challenge the Danish politician’s fiscal policy? To answer our research question we made four sub questions. The first sub question contains a presentation of the danish political system showing initiatives concerning the Danish economic system based on the fiscal pact. The second subquestion is divided in two parts. Each of them deals with the fiscal pacts influence respectively on a national and a municipal level. The third subquestion will by an analysis, assign for theoretical basic ideas, which can be traced in the Fiscal pact. The fourth question will be the finishing element of this paper with a discussion concerning the challenges of the Danish politicians possibilities to pursue an active financial fiscal policy, caused by the Fiscal pact. . Overall our study showed that the fiscal pact challenges and effects the municipal and national politicians options to pursue an active fiscal policy On the municipal level, we were able to conclude, that the municipalities are subjects to the "budgetlaw" principals, which prevents the municipalities to increase the expenses. If a municipality should be able to increase the expenses and income, it has to be equivalent compensated, by a different municipality. If not it will consequently lead to an increase in the domestic aggregate expenses. Our case study and general research of the Fiscal pact and the Budget law, led us to a conclusion, which shows that the requirements of the economic governance is limiting the economical options of the municipal politicians. That is why an approval by the government is required. Even though the municipals is in possession of the required liquidity to finance fixed asset investments, they're still limited by. Besides, the municipalities ability to borrow money from the state has been strongly reduced We can conclude on national level that the fiscal pact challenges the national politician’s opportunities to pursue a fiscal policy because they are restraint to the fact, that the public finances can’t show a deficit bigger than 1% on the GDP’s structural balance. Specific it’s shown in the event of pursuing expansive policy as an economic tool to make fixed asset investments, tax reliefs etc. that in particular are useful to increase the demand and employment during economic downturns. On the other hand we can conclude, that national politicians still have the opportunity to pursue expansive fiscal policy but it requires to be financed.
|Uddannelser||Basis - Samfundsvidenskabelig Bacheloruddannelse, (Bachelor uddannelse) Basis|
|Udgivelsesdato||16 jun. 2014|