Luděk Kouba

Policy autonomy, coordination or harmonization in the persistently heterogeneous European Union?

Abstract Within the context of the continuing integration process in Europe, this paper addresses the question of whether policies in the EU should head towards autonomy, coordination or harmonization. Taking the path dependence effect into account, it is the authors’ opinion that Europe has gone too far in its integration process to be able to continue with policies being fully under the competences of individual member countries. However, the habitual question still arises: does fiscal policy need to be harmonized to a level comparable to monetary policy as these two policies, necessarily, complement each other? This paper argues that it does not. There are three main arguments discussed. Firstly, the authors build on the theory of fiscal federalism. Secondly, there are significantly different regimes of welfare states and extents of social policies among European countries, which strongly determine the character of public finance. And thirdly, the tax systems across Europe are also highly divergent, with many features of continuing tax competition.

A Lesson for the Contemporary European Periphery from the Transition Process of the CEE Countries

How can we rebuild the competitiveness of the so-called periphery countries? This chapter discusses the following two research questions: What are the important factors that distinguish between successful and less successful CEE countries during their transition period? What is a possible lesson from the transition process in the CEE countries for the contemporary European periphery? The first part of this chapter contains initial remarks, terminology and a classification of the CEE countries according to their successfulness in the transition process. The second part provides a list of crucial factors: the level of (non-elite) political stability, the quality of the institutional framework, the maturity and compatibility of informal institutions and the initial level of economic development. The third part states some factors of minor importance for countries’ success in the transition process. The conclusion offers a summary of the previous outcomes and moreover, a discussion of the research questions. Similar to the CEECs before their entrance into the EU, the periphery countries need to find a direction to pursue during the next 10–15 years. Budgetary savings are inevitable; nevertheless, positive long-term visions should also be formulated.