Euro entrance leads to fiscal policy imbalance in European Union.
The article examines how fiscal policies in European countries changed after joining the Eurozone from 1995 to 2010. The researchers used a tool called the cyclical adjusted balance to analyze if the fiscal policies were helping stabilize the economy during different economic cycles. They found that some countries had countercyclical fiscal policies, meaning they adjusted spending and taxes to match the economic situation, while others had pro-cyclical policies, which could worsen economic fluctuations. The study highlights the importance of aligning fiscal policies with economic conditions to promote stability and growth.