Legal foundations of stimulating fiscal policy in the EU

Abstract

The relevance of the study lies in the fact that in the realities of modern economic dynamics and the transformation of socio-economic systems of the EU countries, the legal framework of stimulus fiscal policy is becoming a key tool for restoring economic growth, supporting businesses, and ensuring sustainable social justice. The purpose of this study is to systematize and analyse the specific legal instruments and provisions that underpin stimulus fiscal policy in the EU. The methods used include analytical method, statistical method, functional method, system analysis method, deduction method, synthesis method and comparison method. The study examined various aspects of fiscal regulation aimed at supporting economic development and social stability in the EU. The study is based on the analysis of tax mechanisms, financial instruments and budgetary strategies used to stimulate certain aspects of the economy. In particular, the impact of tax exemptions and privileges on entrepreneurship and investment activity was examined, as well as the effectiveness of fiscal measures to support small and medium-sized enterprises in countries such as Ireland, Poland, and Germany. The latest EU initiatives to stimulate innovation and green technologies were also studied, considering their legal and financial aspects. The main challenges and obstacles that arise in the process of implementing stimulating fiscal policies are highlighted, and possible ways to overcome these difficulties are identified. The study also draws attention to the interaction between fiscal policy and other areas of legislation, such as social and environmental policy, in particular, in the context of achieving sustainable development goals. The practical significance of this study is to provide concrete recommendations for EU governments on how to optimize legal and fiscal instruments aimed at stimulating economic development, innovation, and social stability.