If decision-making is shifted from the national to the European level, the deficit bias of the individual member states inherent in the current set-up of EMU would be mitigated. While this, in itself, is not a guarantee for sound fiscal policy choices, this framework is at least consistent with the concept of mutual liability. What kind of sovereignty shift are we talking about?
Last year, Michel Sapin declared that “la Commission, je le rappelle, n’a absolument pas le pouvoir de rejeter, retoquer ou censurer un budget, comme j’ai pu le lire. Ici, comme ailleurs, la souveraineté appartient au Parlement français.” In a fiscal union, that would change. A member state would have to follow through on the demands of a European fiscal authority.