Working Papers

P. Schlosser – ‘Tightening the knot’: strengthening fiscal surveillance in EMU during the euro crisis

One of the key regularities which appeared to hold so far in European integration is that the closer a policy issue lies to the core of state sovereignty, the least likely it is for integration to occur in that domain (Boerzel, 2005; Lindberg and Scheingold, 1970). This should thus make the study of integration in fiscal policy, undoubtedly a core state power, particularly interesting. In a seminal contribution on the integration dynamics in the fiscal domain, Heipertz and Verdun (2010) looked at the unintended consequences of the Economic and Monetary Union’s (EMU) fiscal framework, the Stability and Growth Pact (SGP). They concluded that it is ‘far too early to look for substantial occurrences of political spill-over in the fiscal domain’ (2010: 82). However, recent evidence shows that the SGP’s reforms and expansion into a broader and more intrusive central fiscal surveillance regime, as part of the Six Pack, Fiscal Compact and Two Pack reforms, has led to further integration in the fiscal realm.

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