Eu Socio-Economic Governance Since the Crisis: The European Semester in Theory and Practice by Jonathan Zeitlin & Amy Verdun

Author:Jonathan Zeitlin & Amy Verdun [Zeitlin, Jonathan & Verdun, Amy]
Language: eng
Format: epub
ISBN: 9780367591212
Google: JiyUzQEACAAJ
Goodreads: 53909412
Publisher: Routledge
Published: 2020-06-30T00:00:00+00:00

Introduction

The European Semester was created in response to the Greek and Euro crises to strengthen and deepen the fiscal and economic coordination of the European Union (EU). At the center of the Semester is an information-driven surveillance process that relies heavily upon fiscal and economic information collected from the member states and analyzed by the European Commission (Commission). This is true for both the Stability and Growth Pact’s (SGP) Excessive Deficit Procedure (EDP) and the Macroeconomic Imbalance Procedure (MIP). The EDP relies on deficit and debt statistics to determine member state compliance and the application of sanctions. The MIP relies on 11 headline and 28 auxiliary statistical indicators as part of the EU’s economic alert mechanism to determine whether to activate In-Depth Reviews and the application of sanctions (Essi and Stiglbauer 2011; Moschella 2014; Zeitlin and Vanhercke 2014). As stated in the Six-Pack, ‘The availability of fiscal data is crucial to the proper functioning of the budgetary surveillance framework of the Union’, and ‘Reliable statistical data is the basis for the surveillance of macroeconomic imbalances’ (Council Directive 2011/85/EU; Council Regulation 1174/2011). Both procedures function in the context of asymmetrical information relationships where supranational organizations must obtain statistical information generated by the member states that may ultimately serve as the basis for corrective sanctioning through the EDP and the Excessive Imbalance Procedure (EIP).

Despite the significance of the Semester’s asymmetric information for EU economic governance, with few exceptions, little scholarly attention has been paid as to how the rules governing the Semester’s procedures for administering these data affect the political relations between EU institutions and the member states (Savage 2005; Schelkle 2009; Mabbett and Schelkle 2014; Gandrud and Hallerberg 2016). This paper addresses this deficiency in the literature by analyzing through a Principal–Agent (PA) framework the politics of asymmetric information in the EDP and MIP. As a result of the Greek and Euro crises, member states agreed to long-standing Commission initiatives to change the information and date gathering requirements of the surveillance process from one characterized by a fire-alarm to a police-patrol system of monitoring. The layering of new rules and administrative practices significantly expanded the scope of economic EU surveillance in the form of the Semester (Chang 2013a; Verdun 2015). In the context of the Semester’s extensive information requirements, this paper first explores how the Commission and the Economic and Financial Affairs Council (ECOFIN) required member state compliance with the statistical provisions of the Semester to strengthen the EDP. For the first time in the history of the Economic and Monetary Union (EMU), a member state has been subjected to the ultimate sanction: a financial penalty. This fine was imposed not for a member state’s violation of the EDPs deficit and debt thresholds, but for the failure to provide accurate statistical information to the Commission. This paper next examines a similar, but less successful initiative by the Commission to strengthen the accuracy of its MIP statistics. Because of these decisions taken by both principals and agents, in the context of ensuring

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