The article presents a theoretical examination of fiscal and monetary governance in the European Union and the United States, by comparing their institutional frameworks, fiscal and monetary policy regulations, and crisis-response mechanisms. This research is grounded in a comparative analysis of the EU and the United States spanning the years 2003 to 2024. The paper integrates a literature review with statistical comparisons and Ordinary Least Squares (OLS) regression, to investigate 11 macroeconomic indicators, which include tax revenue, government expenditure, public debt, the budget balance, the money supply, interest rates, inflation, unemployment, exchange rate fluctuations, and GDP per capita, adjusted for purchasing power parity. The analysis is organised into various economic phases (pre-crisis, post-2008 adjustment, pre-pandemic and post-pandemic), to discern how both cases reacted to significant economic disturbances, and what policy variables were most closely linked to growth outcomes. The results suggest that the United States has probably achieved a superior relative economic performance, due to its policy mix characterised by lower tax burdens, more rapid fiscal adjustments and broader monetary expansion. Conversely, the European Union’s elevated tax levels, increased public spending and slower policy adjustments were correlated with lower GDP per capita growth and extended recovery periods. These findings were based on the results of high P-value and low R, as well as squared results of OLS regression. At the same time, considerations of autocorrelation and multicollinearity have been taken into account.
The introduction of the Maastricht criteria was a crucial step in ensuring fiscal discipline and economic stability in the European Union. However, the crises of recent decades, including the Great Recession, the sovereign debt crisis, the Covid-19 pandemic, and the energy crisis, have revealed the limitations of these rules. Strict fiscal requirements have hindered countries’ responses to economic challenges, highlighting the need for a more flexible and adaptive fiscal policy to better withstand future economic shocks. The aim of this paper is to evaluate the effectiveness of the European Union’s fiscal rules over the 20-year period, analysing GDP growth differences between the EU and the Eurozone, as well as the fiscal performance of individual member states. It also seeks to
classify countries in groups based on economic indicators, identifying those with varying growth rates and levels of effectiveness in managing public finances. The study has revealed differences in GDP growth patterns between the European Union and the Eurozone, with the EU showing more favourable results. In analysing data from 27 EU member states over the 20-year period, four clusters were identified based on economic performance and fiscal policies: catching-up, slow-growing, underperforming, and cutting-edge countries. New members after 2004 demonstrated rapid growth, while countries like Ireland and Luxembourg stood out by their effective economic policies.