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Transfer of Sovereignty and the New European Supervisory Framework

Kovács, O. (2010): Transfer of Sovereignty and the New European Supervisory Framework. News of the Month, ICEG European Center, September 2010 pp. 4-8.

This article addresses the question of how the transfer of sovereignty could emerge during the operation of the planned European supervisory framework for financial regulation which will come into force from January 2011. The potential establishment of a financial supervisory institution has been impregnating the economic discussion regarding the future of the single market and its macroeconomic stability for years. We argue that the framework will per se not be enough to fend off the fiscal alcoholism /laxity/ of member states affecting adversely the macroeconomic stability, unless the EU will concentrate on the modernisation of public finances both on the EU and national levels.