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This paper argues that this link is not independent of the fiscal policymaking structure.
Fiscal governance after the Pact revisions is now arguably better equipped to address major contingencies of fiscal policymaking.
Her remarks appear to presage a big fight between now and the summer between EU leaders over eurozone economic and fiscal policymaking, with Berlin and Paris fundamentally at odds.
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With the political system gridlocked and the sequester in effect, the other arm of economic policymaking — fiscal policy — is out of action.
Both developments signalled a move away from crisis-era policymaking, when major monetary and fiscal decisions were sometimes made as markets were tanking amid fears of a global financial meltdown.
This conclusion has important implications for economic policymaking and for models of fiscal behavior, as the authors discuss.
"The risk of substantial fiscal deterioration, and of deteriorating coherence and credibility in economic policymaking, remain the key rating sensitivities".
Policymaking needs to take account of considerations ranging from fiscal priorities to diplomatic objectives and, particularly, the electoral contract between governments and citizens.
It is about avoiding giving new powers to Brussels over national economic policymaking and tempering the German-led push for enforcing fiscal disciplines, including automatic penalties for recalcitrants, policed by the European commission.
"The downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenge," the company said in a statement.
"The downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges," they explained in the statement accompanying Friday's decision.
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