The European Fiscal Union creation process

The paper presents evolution of the European Union fiscal system creation process as well as outlines problems in functioning thereof that have arisen during recent years and the main reforming (modification) trends. The analysis is primarily focused on creation of the fiscal union within the EU. In this regard, the idea of two different groups of countries moving to the common goal at different paces is becoming ever increasingly much-talked-about in the EU. The first group comprises donor countries that adhere to all treaties and fiscal discipline, while demonstrating respective positive macroeconomic indicators. The second group implies countries of Euro-periphery, where the above processes take place along with significant complications or do not occur at all. In these countries Eurosceptic positions are also quite strong, which often leads to taking measures contrary to the jointly adopted decisions. Currently, there is no clear understanding within the EU as to which way out of the crisis should be taken. However, profound understanding of the crisis causes and active work on preparation and implementation of measures to overcome the negative effects of this crisis suggest availability of sufficiently favorable prospects for further development of the EU fiscal system (including formal creation of the Fiscal Union). Based on the conducted analysis conclusions have been made as to potential vectors of action aimed at improving EU fiscal system, while specific recommendations on actions to be taken by Ukraine have been developed (particularly, as regards budget forecasting and planning) with the purpose of harmonizing Ukrainian financial institutions and mechanisms with the EU fiscal system