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The debate on the necessity of a federal fiscal capacity in the EU has featured prominently on the EU's agenda over the past decade. New Generation EU marks a historic breakthrough in that regard. This breakthrough has been accomplished in order to fulfil macroeconomic stabilization functions, but the bulk of the funding has been earmarked for green transition projects. This paper asks whether a federal budget has added value in relation to the green transition and provides a theoretically informed answer. It ends with a call to revise articles 311 and 312 TFEU so as to grant fiscal powers to the EU [ABSTRACT FROM AUTHOR]

NextGenerationEU, the recovery programme adopted during the COVID-19 pandemic, did not provide the EU with fiscal sovereignty. Fiscal sovereignty remains under the control of the member states which are, however, constrained by the Stability and Growth Pact. Comparative federalism shows that central fiscal sovereignty requires granting the power to tax to the centre but without impairing the fiscal sovereignty of the units. The co-existence of two distinct, yet connected, fiscal sovereignties (EU and member states) would mean departing from the regulatory model of fiscal integration created with the Maastricht Treaty, and would thus require treaty change. Future research should perform a more thorough comparison between the EU and fiscally centralized and decentralized federations. Qualitative comparative analysis could complement process tracing and systematic content analysis to identify combinations of conditions that make the co-existence of fiscal sovereignties possible in consolidated federal polities – and still impossible in the EU. Books reviewed Paul Dermine (2022) The New Economic Governance of the Eurozone. A Rule of Law Analysis. Cambridge: Cambridge University Press. Federico Fabbrini (2022) EU Fiscal Capacity. Legal Integration After COVID-19 and the War in Ukraine. Oxford: Oxford University Press. Brady Gordon (2022) The Constitutional Boundaries of European Fiscal Federalism. Cambridge: Cambridge University Press. Tomasz P. Woźniakowski (2022) Fiscal Unions. Economic Integration in Europe and the United States. Oxford: Oxford University Press. [ABSTRACT FROM AUTHOR]

This paper argues that, on the development of European Union (EU)/Eurozone fiscal capacity German governments have consistently engaged in foot-dragging. Few German state elites have ever supported European fiscal capacity building beyond the EC budget. Following the outbreak of the Eurozone sovereign debt crisis, German governments agreed to the creation of financial support mechanisms only with reluctance. We see a case of continuity in German policy preferences driven by consistent ordoliberal and, specifically, moral hazard concerns. The important long-term change that we can observe relates to the growing importance for successive governments of avoiding audience costs driven by sceptical public opinion and the rise of a challenger party in German politics. German government support for a massive EU fiscal response to the economic crisis triggered by the COVID-19 pandemic demonstrates an exceptional policy position in favour of temporary financial mechanisms involving no fiscal transfers among member state governments. [ABSTRACT FROM AUTHOR]