Sub-State Entities within the EU: Experience, Economics and Enlargement

Watson, Maxwell

Publication year:

2008

Publication place:

Donostia-San Sebastián

ISBN:

978-84-8419-162-9

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Summary

Regional disparities can trigger demands for autonomy: poorer regions fear domination while richer resist transfers. But economic features of federalism need careful design, to foster income convergence. One challenge is to preserve hard budget constraints, including under the Stability and Growth Pact. Internal stability pacts are popular; but more market-based approaches may be needed in countries with many small authorities.