Fiscal Federalism: Eurozone Budget and Its Stabilization function

Kadidlo, Lukas (2015) Fiscal Federalism: Eurozone Budget and Its Stabilization function. [Conference Proceedings] (Submitted)

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Abstract

The main goal of this working paper is to design Eurozone budget that would be able to perform stabilization function and thereby help Eurozone member states overcome temporary asymmetric shocks in times of financial and economic crisis. This is quite a new, attractive and frequently discussed topic in the scientific community. The litera-ture overview includes description of principle of fiscal federalism and up-to-date sci-entific articles dedicated to stabilization function of a budget, European budgetary structures and other issues relevant for the Eurozone budget design. Section results contains concrete steps to design Eurozone budget, namely identifica-tion of its size and also description and quantification of individual revenues and ex-penditures of the Eurozone budget. Eurozone unemployment scheme consisting of Eu-rozone payroll tax and unemployment benefits represents autonomous and the most important part of the budget. In this working paper, also net gainers and net contribu-tors of the Eurozone unemployment scheme are calculated and analyzed. The identifi-cation of net gainers and net contributors of the Eurozone unemployment scheme is what makes this article unique and special. Eurozone budget is commented and ana-lyzed as a whole in recommendations and discussion and a few important topics of fur-ther research are identified in the conclusion of this working paper.

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