There is no clear-cut evidence on how the adoption of the European scal standards in uences discretionary scal policies within the Member States. This study investigates that phenomenon on the example of the 2004 enlargement. The results show that the e ects of the adoption of EU scal rules bring a statistically signi cant change towards more counter- cyclical behavior. The results are robust for di erent model speci cations, including alternative time spans and correcting for the possible in uence of the nancial crises and political forces. Interestingly, the year 2004 did not have any signi cant impact on the change in scal policies in the Old Member States, suggesting that the EU entry might motivate new members to run more prudent budgetary policies.
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