The Stability and Growth Pact - Theorizing a Case in European Integration*

Abstract

This article looks at the Stability and Growth Pact (SGP) as a case study in European integration. Applying the theoretical lenses of various European integration approaches (intergovernmentalism, domestic politics, neofunctionalism and an 'expertocratic' approach) it seeks to explain the creation of the SGP as well as its subsequent implementation. The findings show that these approaches are able to illuminate different parts of the process. The article thus argues that only an eclectic combination of the approaches provides a satisfactory theoretical explanation of the SGP as a fundamental element of the rules-based economic and monetary union (EMU) regime.

In a Spirit of Solidarity? Justifying the European Financial Stability Facility (EFSF) in National Parliamentary Debates

“…The Stability and Growth Pact (SGP), for example, only envisaged the need for preventive measures and peer‐group pressure (Dyson, ; Segers and van Esch, ; Heipertz and Verdun, ; Buti and Pench, ). It had been based on the assumption that the pressure to maintain budgetary discipline exercised by the markets and peers within the euro group would be sufficient (Buiter et al ., ).…”

Political Science and the Eurozone Crisis. A Review of Scientific Journal Articles 2004–15

“…In the run‐up to the first reform of the SGP in 2005, several articles deal with the Pact's politico‐economic rationale and its functioning in practice (Donnelly, ; Ferré, ; Heipertz and Verdun, ; McKay, ; Schelkle, ). McKay (, p. 540) argues that ‘the potential political costs of the SGP almost certainly outweigh any possible [economic] gains’.…”

Economic Government of the EU

“…The Stability Pact in its particular form was a concession of France and other countries to the German government's acquiescence to EMU, which in turn depended on convincing sceptical German public opinion that EMU meant 'sound money' (Heipertz and Verdun 2005). The 3 per cent limit was not the best functional solution to the problem of free-riding in monetary unions, but was the only possible and publicly marketable one.…”