ALTERNATIVE FISCAL POLICY IN THE EUROPEAN UNION: FISCAL DEVALUATION

Abstract

European Union integration policies that emerged as the unity of economic, monetary and political integration among the member countries affect the national policies of the countries in the union. The decisions taken by the member countries in order to ensure that the unification takes place in a healthy manner have created sanctions on the member countries. One of these decisions is the implementation of the Maastricht Treaty. The treaty creating the monetary union of the member states in question to fulfill the needs that may arise to avoid any discrepancies by determining the rules that were asked. With these rules, which are known as Maastricht criteria, member states transferred their powers related to monetary policies to the European Central Bank. At this point, member states are trying to eliminate the restrictions on monetary policy through fiscal policies. One of these alternative policies is the fiscal devaluation. A monetary policy is an alternative monetary policy tool that allows countries to produce effects similar to monetary devaluation by using fiscal policy tools.