The fiscal lessons of the global crisis for the European Union: the destructive consequences of tax competition

The global crash of 2008/9 revealed many hidden fault lines in the edifice of finance capitalism and in the policy architecture of the states called upon to sort out its mess. Many of these fault lines were programmed into the operational mindset of the most recent generation of policy makers in the so- called ‘advanced economies’. One such fault line is evident in the Balkanisation of macro- economic policy making, in particular the neutralisation of policy coordination in the adoption of autonomous central banks and the associated imposition of a debt- avoidance imperative on treasury departments and individual spending ministries/agencies in most states. The real fragmentation of the political governance of macro- economic affairs stands in stark contrast to the popular image among European electorates, for example, of an incremental arrogation of power in policy making to public officials at both state and, in particular, at EU level.