Book contents
- Frontmatter
- Contents
- Foreword
- Preface and Acknowledgments
- List of Contributors
- 1 Constitutional Issues in Modern Democracies
- PART I CONSTITUTIONAL THEORY
- PART II ELECTORAL SYSTEMS AND INSTITUTIONS
- PART III CONSTITUTIONAL ISSUES FOR A FEDERAL STATE
- 12 Ensuring a Stable Federal State: Economics or Political Institutional Design
- 13 A Proposal for Dynamic European Federalism: FOCJ
- 14 The Maastricht “Excessive Deficit” Rules and Creative Accounting
- 15 Subsidiarity, Federalism, and Direct Democracy as Basic Elements of a Federal European Constitution: Some Ideas Using Constitutional Economics
- Index
14 - The Maastricht “Excessive Deficit” Rules and Creative Accounting
Published online by Cambridge University Press: 05 June 2012
- Frontmatter
- Contents
- Foreword
- Preface and Acknowledgments
- List of Contributors
- 1 Constitutional Issues in Modern Democracies
- PART I CONSTITUTIONAL THEORY
- PART II ELECTORAL SYSTEMS AND INSTITUTIONS
- PART III CONSTITUTIONAL ISSUES FOR A FEDERAL STATE
- 12 Ensuring a Stable Federal State: Economics or Political Institutional Design
- 13 A Proposal for Dynamic European Federalism: FOCJ
- 14 The Maastricht “Excessive Deficit” Rules and Creative Accounting
- 15 Subsidiarity, Federalism, and Direct Democracy as Basic Elements of a Federal European Constitution: Some Ideas Using Constitutional Economics
- Index
Summary
Introduction
Constraining rules are bound to give rise to opportunistic behaviors designed to elude them. In examining the Maastricht budgetary rules, therefore, one should expect opportunistic accounting behaviors. These may be called “creative accounting” in the sense that they do not reflect reality but rather are designed to demonstrate that constraints are met. Such behaviors may be considered kinds of intended or unintended fiscal illusion. The study of creative accounting is therefore at the core of the issue of budgetary transparency.
Because of the scope for opportunistic behaviors, some have expressed skepticism about the possibility of truly enforcing constitutional fiscal rules, consisting of parametric constraints (Von Hagen, 1991). However, it is argued here that in the context of the Maastricht rules, it is possible to limit substantially the scope of opportunistic behavior. The real problem is the willingness of the relevant authorities to accept inescapable constitutional fiscal constraints. Thus far, the authorities have tolerated or even fostered a climate in which the political considerations of a smooth launch of the European Monetary Union (EMU) have been held to be more important than the application of the constraints.
The Inadequacies in the Accounting Setting of the Maastricht Fiscal Constitution Rules
The Maastricht Fiscal Constitution
The Treaty of Maastricht of 1992 introduces a set of rules constraining the budget and the public debt for the countries expected to become members of the EMU.
- Type
- Chapter
- Information
- Rules and ReasonPerspectives on Constitutional Political Economy, pp. 258 - 288Publisher: Cambridge University PressPrint publication year: 2001
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