Flexible Austerity and Supranational Autonomy. The Reformed Excessive Deficit Procedure and the Asymmetry between Liberalization and Social Regulation in the EU

Abstract

This paper analyzes how the apparently merely technical introduction of reversed qualified majority voting for the excessive deficit procedure included in the Six Pack and the Fiscal Compact shifts not only the institutional balance between the European Commission and the Member States but also the relationship between liberalization and social regulation in the EU. In bringing together institutional analysis and a political economy perspective, the paper shows how the strengthening of the Commission's discretionary decision‐making authority in a context of intergovernmental power imbalances between debtor and creditor states extends the asymmetry between market‐making and market‐correction to the area of political decision‐making. In consequence, economic and social policies are subordinated to the primacy of austerity.

The Meaning of the European Union and Public Support for European Integration

“…If instrumentalism is the prevalent explanation for EU support, it means that the EU must convince the public that it increases economic welfare. This is far from being a consensual opinion, however, as the EU is often criticised for policies that are seen as promoting deregulation instead of a social market economy (Scharpf, 2010) orin the wake of the economic and financial crisisfor its adoption of austerity policies (Seikel, 2016). Public perception of the economic consequences of the EU remains divided, and subjective perception of these consequences shall be investigated in greater detail.…”

Expertise in European Economic Governance: A Feminist Analysis

“…In particular before the crisis, the benefits of EU membership and of EU legislation were said to legitimate the transfer of powers from national governments to the EU level. However, in the wake of the economic crisis and the transformation of economic governance that followed, output legitimacy has become increasingly contested (Seikel 2016;Jones 2015). These circumstances of contested legitimacy highlight the usefulness of understanding legitimacy as a process, rather than as a binary state.…”

Modular sovereignty, security, and debt: The Excessive Deficit Procedure of the European Union

“…The EDP belongs to the 'corrective arm' (Tutty, 2012: 12) of the SGP, being a procedure to lead a state facing excess deficit back into greater fiscal discipline. The procedure, not untypical for EU procedures, combines supranational and intergovernmental bodies of governance (see Seikel 2016). The European Commission, upon receiving macroeconomic data from the member states, makes a recommendation to the ECOFIN Council (representing the member states) to start an EDP in case there is indication that the stability criteria are not fulfilled.…”

“…Staehr, 2012; Mortensen, 2013) and by additional agreements since 2011 referred to as the 'Six Pack' and 'Two Pack' regulations, amount to the following. The Fiscal Compact, actually referring to that part of the TSCG that commits to balanced budgets in the contracting parties and to a strengthening of the EDP (de Haan et al, 2012: 6), has been identified as the core element of the recent reforms of supranational economic governance in the EU, which put budget frugality and fiscal discipline at center stage (Seikel, 2016). This is to be achieved by three different sets of surveillance and sanctioning procedures targeted toward disciplining the macroeconomic strategies of the member states: first, excessive deficit -that is, the EDP, now operating according to a changed procedural logic (see below); second, macroeconomic imbalances; and third, functionality of financial system (the last of which has its own surveillance and sanctioning procedures, see Tutty, 2012).…”