Negotiating fiscal space

• Robert Schuman Centre for Advanced Studies

Join Camilla Locatelli for a discussion on the Euro's second decade in Italy and France. This seminar is co-organised by the Political Economy Working Group and the EU Studies Working Group.

The second decade of the Euro has been marked by multiple crises that put a strain on the institutional structure of the monetary union. The policy response to the sovereign debt crisis, in particular, pushed for deepening of economic integration that resulted in an increased involvement of European Institutions in national fiscal policy making. This thesis analyses variation in member states’ reaction to the pressures exerted by the new and highly technical European framework of fiscal rules. Europe’s heightened involvement and the increasing technicality of the framework, designed to de-politicise fiscal policy making, profoundly transformed the field of budgetary policy in a new regime complex where accountability and compliance are difficult to assess (Drezner, 2013; Guter-sandu & Murau, 2021). Many studies have focused on how this new architecture has re-structured power division between European institutions (Bauer & Becker, 2014; da Conceição-Heldt, 2016). Yet, few contributions have looked at how the complexity of this new regime has restructured the fiscal policy field at the domestic level (Dellepiane-Avellaneda & Hardiman, 2015).

In her dissertation project, visiting student Camilla Locatelli argues that, in order to understand how fiscal pressures have resulted in different strategies of consolidation, we need to account for the way domestic systems of economic policy making have been transformed by the increasing complexity of the EU fiscal framework. She investigates how this new system of fiscal governance has transformed the relationship between national economic institutions, in particular finance ministries and national central banks, and how the domestic reception of fiscal pressure has resulted in more or less effective strategies to bargain for fiscal space. Relying on semi-structured expert interviews and an extensive document analysis she compares these transformations in Italy and France in the period 2011-2019.