Giacinto della Cananea
Government Deficits and Investments: A European Legal Framework
In the academic and institutional debates concerning the role of the European Union with regard to national budgetary policies, there is an increasing concern for the limits that the EU has imposed on government debts and deficits. Much has been written, especially in economic literature, about the conventional nature of such limits. While this literature contains some useful insights, it will be argued that two central aspects of the topic have been insufficiently examined and only partially understood: one is the rule concerning government expenditure for investments, the other is its connection not only with the ‘guiding principle’ according to which financial conditions must be sound, but also with the common constitutional tradition which is reflected in such principle, that is to say financial stability. It will be argued, therefore, that the critique according to which the EMU has a negative impact on national policies aiming at financing investments is neither normatively nor empirically sound.