Economic and fiscal policy coordination after the crisis: is the European Semester promoting more or less state intervention?

Haas, Jörg; D’Erman, Valerie J.; Schulz, Daniel F.; Verdun, Amy

doi:10.4324/9781003089858-4

Cited by 13 publications

(22 citation statements)

References 23 publications

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“…LMEs were strongly influenced by a shareholder value governance model with CSR being perceived as a threat due to its extra costs that could potentially further worsen companies’ financial situation at a time of crisis (Friedman, 1970). CMEs, on the other hand, were strongly influenced by a partnership governance model and the combined EU policy toward addressing the financial crisis (Hass et al , 2020), meaning that CSR tended to serve as a strategic lever meant to help companies respond to pressures exerted by state authorities. They achieved this by renovating their CSR behavior and promoting a shared value creation model that would serve all of society.…”

Section: Discussionmentioning

confidence: 99%

Corporate social performance (CSP) in time of economic crisis

Cassely

Larbi

Revelli

et al. 2021

SAMPJ

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Purpose This study aims to compare the different effects of the 2008 economic crisis on companies’ corporate social performance (CSP) in coordinated market economies (CMEs) and liberal market economies (LMEs). Design/methodology/approach This paper mobilizes a pluralistic theoretical framework that borrows from neo-institutional and corporate governance theories to compare the impacts of the 2008 economic crisis on long-term CSP in an international context. Based on the longitudinal database of Vigeo Eiris (2004–2015), the panel was decomposed between two models of capitalism (LME and CME). For each model, this paper conducted a series of regressions, taking into account the longitudinal nature of the data using estimates based on generalized estimating equations (Liang and Zeger, 1986). Findings The paper shows that the economic crisis prompted companies operating in LMEs and CMEs to reorient their corporate social responsibility (CSR) practices in quite different ways during the four-year period that the crisis lasted, as well as the succeeding four-year post-crisis period. While CSR was perceived in LMEs as a threat during the crisis period because of the additional costs it generated, it offered CME companies a way of redefining how they relate to the rest of society, with their goal becoming the creation of greater shared value. Research limitations/implications The results are dependent from the data, and specifically from the Vigeo Eiris database. It would be interesting to extrapol this kind of research with the use of other CSP/environmental, social and governance (ESG) databases as Morgan Stanley Capital International, Sustainalytics or RepRisk, to compare and conclude more globally on tendencies. Another limitation relates to the binary nature of Hall and Soskice’s (2001) typology, with its neo-institutionalist inspiration, that puts Continental European and social-democratic models of capitalism on the same plane. Practical implications This study teaches managers, analysts and policymakers that CSR can be a powerful strategic lever capable of remedying the harmful effects that economic crises have in both LMEs and CMEs, notwithstanding the cultural, socio-economic and political differences between these models of capitalism. Economic and social crises must help companies to rethink and revisit their business models and CSR practices to subsequently implement sustainability strategies more in sync with the values forced upon them by the economic systems to which they belonged but also by all their stakeholders. Social implications From a managerial standpoint, this study allows practitioners to consider CSR as an opportunity to rethink their strategy and business models in a period of crisis, and no more a threat that could reduce the economic performance in increasing the costs, and thus, the cost of financing. Originality/value After reading the literature on the topic, this paper clearly thinks about the high degree of contribution of the paper, as the topic is not so developed and that the study implies several contributions. First, from a theoretical level, the study differs from previous research studies insofar as it compares the impacts of the economic crisis on companies’ CSP in CMEs and LMEs using a theoretical framework that operationalizes both contractual and neo-institutional theories. Second, from a methodological standpoint, the approach using an ESG data provider known worldwide (Vigeo Eiris) has not been down yet. Third, on a managerial level, the present study teaches managers, analysts and policymakers that CSR can be a powerful strategic lever capable of remedying the harmful effects that economic crises have in both LMEs and CMEs, notwithstanding the cultural, socio-economic and political differences between these models of capitalism.

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Section: Discussionmentioning

confidence: 99%

Corporate social performance (CSP) in time of economic crisis

Cassely

Larbi

Revelli

et al. 2021

SAMPJ

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“…This could suggest that, in practice, a clear link between the ES procedure that, apart from the binding rules, requires other commitments in coordinating multiple national policies at the EU level and national policy-making might be missing. This rather raises concerns from a democratic legitimacy point of view since, even as a soft-governance tool, the ES enables EU steering and guiding of member states' policies (Haas et al, 2020) and "involves the making of political judgements at the European level" (Crum & Merlo, 2020, p. 407). In this regard, EU targets and objectives in the ES concerning broader socio-economic development in the EU that can influence national policy choices might not be detected and adequately scrutinised and debated by national parliaments, if at all.…”

Section: Discussionmentioning

confidence: 99%

Routine or Rare Activity? A Quantitative Assessment of Parliamentary Scrutiny in the European Semester

Skazlić

2021

PaG

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The European Semester is an EU procedure, designed to facilitate coordination between national and EU actors in planning and implementing economic and fiscal policies and contribute to sustained economic convergence and employment in the EU. Scholars have highlighted this procedure as a crucial area of EU politics for national parliaments since its introduction in 2011. However, national parliaments participate differently in the European Semester. This article investigates which factors (institutional, political, economic) are more likely to intensify parliamentary engagement at the national stage of the procedure, based on a comparative quantitative analysis of parliamentary scrutiny activities across 35 parliaments/chambers in the EU over the 2014–2017 period. The article offers new insights about prospects for greater parliamentary accountability in the European Semester in practice.

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“…Indeed, the purpose of the ES is also to “ensure sound public finances, prevent and correct excessive macroeconomic imbalances, foster structural reforms and boost jobs, growth and investment” (Efstathiou and Wolff 2018 , p. 2). Some scholars sustain that the objective of the ES is “to transform BEPGs and EGs into a binding process” (Bénassy-Quéré 2015 , p. 7) so that “EU member states align their budgetary and economic policies with commonly agreed objectives” (Haas et al 2020 , p. 331).…”

Section: European Semester: Aims Processes and Outputsmentioning

confidence: 99%

“…Indeed, before the crisis, structural reforms and budgetary surveillance followed different timing and procedures within an ex-post coordination unable to create synergies. Despite the single monetary policy remaining the main argument to coordinating budgetary policies (Alcidi and Gros 2017 , p. 1), the ES connection with different sanctioning regimes makes this tool flexible enough to balance the need to limit the negative spillovers that may arise within a monetary union with the degree of interference in national policies (Haas et al 2020 ).…”

Section: European Semester: Aims Processes and Outputsmentioning

confidence: 99%

“…Copeland and Daly ( 2018 , p. 1002) sustain that “the degree of progress towards social policy in the European Semester (2011–15) has been conditional and contingent” and that “EU social policy as enunciated through the CSRs is much more oriented to supporting market development than it is to correcting for market failures”. The role of the social dimension within the EMU is a highly debated issue that goes beyond the ES and deals with the structure of the EU itself (see Haas et al 2020 ; Minkkinen and Patomäki 1997 ). The way in which the crisis was managed led many scholars to believe that “EU social policy seems to be characterized by a tension of high hopes and limited realization” (Graziano and Hartlapp 2019 , p. 1485).…”

Section: European Semester: Aims Processes and Outputsmentioning

confidence: 99%

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Socio-Economic and Political Challenges of EU Member Countries: Grasping the Policy Direction of the European Semester

Casagrande

Dallago

2021

Comp Econ Stud

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The European Semester (ES) and the country-specific recommendations (CSRs) have been introduced with the purpose to promote flexibility and adaptation to national circumstances in the governance of fiscal policies. To assess whether the ES has contributed to reconcile economic and social objectives, we measured, through the distance to frontier (DTF) score methodology, the distance of each member country from a benchmark based on EU aims and values defined in the EU treaties. Results show that EU member countries are far from the benchmark and CSRs have not prevented a progressive deterioration of stability and cohesion from an economic, political and social perspective. A content analysis of the CSRs issued from 2011 to 2018 and a comparison with the DTF scores reveal a weak connection between member countries’ performance and CSRs. Despite the social content of many CSRs, we actually observe a “commodification” of their goals. CSRs promote a society functional to flexible and competitive markets, and compatible with the requirements of fiscal discipline and sustainability. This neoliberal approach apparently played a role in the EU deterioration and makes the “socialization” of the ES a process with ambiguous implications for European citizens.

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Economic and fiscal policy coordination after the crisis: is the European Semester promoting more or less state intervention?

Cited by 13 publications

References 23 publications

Corporate social performance (CSP) in time of economic crisis

Corporate social performance (CSP) in time of economic crisis

Routine or Rare Activity? A Quantitative Assessment of Parliamentary Scrutiny in the European Semester

Socio-Economic and Political Challenges of EU Member Countries: Grasping the Policy Direction of the European Semester

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