Monetary policy and fiscal monitoring

Abstract

The EU has performed a prominent governance role in monetary policy and fiscal monitoring. In monetary policy, the EU emerged as an agent of supranational governance, whereas fiscal policy remained a member-state responsibility. Its fiscal monitoring role was limited to coordination via best practices, benchmarking, peer pressure, and some rules (with monetary sanctions as a possibility). The chapter catalogues the instruments the EU has at its disposal to ensure compliance, EU governance modes, and its expanded legal prerogatives in the domains of economic and monetary policies. It also discusses the EU's role as a regional actor in these domains and traces the ECB's transition from eschewing a global role for the euro, believing that its impact would reflect its internal policies rather than an explicit external policy goal, to accepting that the euro had a global impact and the ECB should consider its promotion as an instrument of geopolitics.