This presentation focuses upon the relationship between fiscal federalism and economic inequalities in the european area, with a particular attention to the functioning of financial equalisation mechanisms. At first, I will highlight how the stricter butgetary rules adopted during the economic crises in Europe have contributed to an increase of the economic differences among territories of the same State. To solve this problem the intervention of the central State has become fundamental both in regional States and in federal States, despite the attempt to give responsabily to local authorities as well. In fact, the central State has the task to guarantee the economic unity and a common standard of protection for fundamental rights. At this point, I will compare the equalisation mechanisms adopted in various european States and their functioning with the aim to identify which one could be considered a suitable instrument to face the problem of the economic inequalities.
The conference will attempt to describe how the system of fiscal federalism functions in times of crisis, comparing the european experience with that of Latin America. In particular, it will focus on the diverse tools used to achieve equilibrium in an unstable system, simultaneously guaranteeing that the exercise of fundamental rights be equitable in the entire affected territory. To that end, it will analize the financial coordination systems and distributive principles of public budgets at all levels of government, exposing the most severe problems facing the taxing and spending authorities.
In Brasil the publication of the Fiscal Responsability Law in the year 2000 tried to led the brasilian public finance to new directions, as evidenced by the introduction of the responsible financial management regime whose aim was to promote an adjustment in the public finance of the federated entities.
Nevertheless, the fiscal crisis – that has struck the Country since 2010 – led to the use of techniques of “creative accounting”: these techniques have distorted the public finance and the existing rules concerning the budgetary managment. The result has been the financial collapse of various States in the Federation, thus causing problems of financial insolvency. Various federated States have suspended payments and have declared the “state of financial calamity”, so trying to obtain financial aid from the central government. This presentation analyses these problems and the current financial situation in Brasil.
Reconciling diversity and social cohesion is a common concern in constitutional studies, one that has often been resolved by resorting to federal forms of government. Economic inequalities can also prompt the choice of federalism. The goal of this presentation is to offer a preliminary theorization of economic asymmetries in public law and identify how federal constitutions can balance their unifying role while curbing economic inequalities. By embracing a theoretical and normative approach, the presentation explores how certain federal-based mechanisms running both horizontally and vertically (fiscal federalism being an example) could be better employed to help reconcile socio-economic differences. I propose a two-prong argument: first, I recommend taking economic inequalities more seriously. Next, I claim that the principle of (federal) solidarity represents the legal foundation on which richer or economically successful regions can be required to help poorer regions.