Moreover, with high inflation and further economic growth, government revenues have also increased. However, given the elevated public debt levels of several countries and the slowdown in economic growth, further tightening of government borrowing conditions will put pressures on fiscal policies.
In addition, the current European Commission budget is very small in comparison to the US federal budget, and certainly too small for significant fiscal transfers. Instead, our system relies much more on the intertemporal absorption of shocks within individual countries. This works through automatic stabilizers in national budgets, which are large in comparison with US state budgets.