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The Fiscal Constitutionalism Theory Facing The Global Financial Crisis

648 words - 3 pages

In the 2008 a profound financial crisis has shaken the world economies and caused recession with bad growth prospects. This, with provoking high unemployment rates and welfare losses, has also shed a light on the weaknesses
of the modern States. The markets, as underlined by the crisis, are globalized and the policies are no longer a National matter.
The financial crisis have been followed by a more circumscribed and still sound sovereign debt crisis in the Euro area countries.
The first relevant consequences has been that economies growth has slowed down, thus creating imbalances in national public finances.
Nevertheless, the globalization have stressed that the provision of goods is becoming a complicate issue with the natural aging of the population and the losses of revenues deriving by the possibility to contracting on distances and establishing the company seat in low taxes jurisdictions.
Another major issue is whether the increasing difficulties encountered by the States in administering their own revenues are gradually leading the States in forced choices to preserve their sovereignty. This could be the adoption of a common set of rules or the set of different state form, as for the federation. Each of this solution entails a partially loss of sovereignty. In the first case the sovereignty is loss in favor of supranational entities and are negotiated with other States. In the second case the loss of sovereignty is primarily in favor of the citizen1
There is, of course, a third choice, which is stand alone States, but this is not take into account in this work.
The modern State provides a range goods and services which of course have a cost for the collectivity and require, at least, two different question to be answered: which goods are to be provided? Which level of government should provide these goods? The Public choice founds that this framework lacks of an important element: the political constraints that prevent the...

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