Implementation of harmonized fiscal policy on the EU member states

The European Union is characterized with centralized monetary policy and decentralized fiscal policy. In the time when the EU was created and when the euro was introduced as a single currency this seemed like a good solution. All the countries in the euro area shared common monetary policy and in the same time were not willing to give up of the authority regarding conduction of their national fiscal policies, especially in levying taxes. Due to that, fiscal policy was coordinated first by the Maastricht convergence criteria and later on with the main Stability and Growth Pact and the reforms of the same. However, in the time of crisis it was shown monetary and fiscal policy are not coordinated which led to even deeper crisis. Not much was left for the EU countries to overcome the crisis and problems with debt and deficit, especially in those who had the euro as the main currency. They had the find new ways of dealing with the situation. In this paper the progress of common fiscal policy in the EU will be shown, all its advantages and disadvantages, as well as the future steps