The Role of Crisis in State-Building the European Union through Finance and Taxation: Will COVID and the Russian Attack Trigger Further Union?

Abstract

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The European Union tax and finance sovereign character has been frequently denied. However, the analysis has been frequently single-sided on economic stability or resorting to quantitative arguments. Thus, the evolution and qualitative side of the issue has been overlooked. Following the works on the Tax State, this paper aims at reviewing how the interaction of crisis/wars, tax and sovereignty has contributed to the sovereign status of the European Union. The chapter concludes that despite the competences and financial resources of the EU remains somehow limited, crisis have reinforced the sovereign financial status of the EU allocating increasing competences on taxation, financial supervision, financial stability and redistribution. This shows the sovereignty reinforcement-follows-crisis character of sovereign entities. In addition, it also shows that despite the small amount of the EU budget, its value is much more as targeted at projects where national budgets are constrained and its redistributive function across the EU as a sovereign function. It concludes that current crisis funding allocation may be also an indicative of further sovereign development of the Union.