Johnston, Andrew and Pugh, Trevor J. (2022) Fiscal austerity and monetary largesse : the EU’s constitutional and ideological straitjacket. In: Sjåfjell, Beate and Villiers, Charlotte and Tsagas, Georgina, (eds.) Sustainable Value Creation in the European Union : Towards Pathways to a Sustainable Future through Crises. Cambridge University Press, pp. 89-112. ISBN 9781009243841
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Abstract
This chapter argues that the combination of the European economic and monetary constitution with neo-liberal ideology amounts to a straitjacket that is impeding the necessary move towards a more sustainable economy. The chapter explores the limitations on Member State fiscal spending contained in the Treaty on the Functioning of the European Union, and contrasts those limitations with the very broad discretion granted to central banks to conduct monetary policy. Central banks’ ‘quantitative easing’ policies have, as they were intended to, boosted asset prices, skewing wealth distribution in favour of the already wealthy. They have also lowered the borrowing costs facing governments and large corporations, but it is not clear that they have been successful in terms of stimulating economic growth through higher investment and spending. Finally, the chapter looks at the EUs fiscal and monetary response to the COVID-19 pandemic. Does it mark a permanent change that may lead to a more sustainable economy, or, as the pandemic recedes, will the EU return to its constitutional and ideological straitjacket? We fear it will be the latter.
| Item Type: | Book Item |
|---|---|
| Subjects: | H Social Sciences > HC Economic History and Conditions H Social Sciences > HG Finance |
| Divisions: | Faculty of Social Sciences > School of Law |
| Library of Congress Subject Headings (LCSH): | Fiscal policy -- European Union countries, Financial crises -- European Union countries, European Union countries- -- Economic conditions, Sustainable development -- European Union countries, Neoliberalism -- European Union countries, Monetary policy -- European Union countries |
| Publisher: | Cambridge University Press |
| ISBN: | 9781009243841 |
| Book Title: | Sustainable Value Creation in the European Union : Towards Pathways to a Sustainable Future through Crises |
| Editor: | Sjåfjell, Beate and Villiers, Charlotte and Tsagas, Georgina |
| Official Date: | 1 December 2022 |
| Dates: | Date Event 1 December 2022 Available |
| Page Range: | pp. 89-112 |
| Status: | Not Peer Reviewed |
| Publication Status: | Published |
| Re-use Statement: | This material has been published in revised form in Sustainable Value Creation in the European Union : Towards Pathways to a Sustainable Future through Crises edited by Sjåfjell, Beate and Villiers, Charlotte and Tsagas, Georgina. https://doi.org/10.1017/9781009243841.008. This version is free to view and download for private research and study only. Not for re-distribution or re-use. © Cambridge University Press |
| Access rights to Published version: | Restricted or Subscription Access |
| Date of first compliant deposit: | 19 February 2024 |
| Date of first compliant Open Access: | 20 February 2024 |
| Related URLs: | |
| URI: | https://wrap.warwick.ac.uk/183497/ |
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