EU Economic Governance: Still Not Fit for Purpose

On May 14, I gave a presentation entitled “EU Economic Governance: Still not fit for Purpose” for the Axis on the Transformation of Capitalism of the European Studies Center at Sciences Po-Paris. I discussed EU economic governance during the Eurozone crisis, the Covid-19 crisis, and then focused on the current reforms of the fiscal rules, which will make it very difficult for EU member-states to invest sufficiently to meet their targets with regard to climate change and social inequality, let alone the spending needs related to the Ukraine war.

Abstract of the talk:

With its recent reform of the fiscal rules of the Eurozone’s Stability and Growth Pact, suspended during the Covid-19 pandemic, the EU has gone back to ‘governing by rules and ruling by numbers.’  These fiscal rules, together with the failure to add any significant new EU level fiscal capacity, leave the EU unable to address its many challenges in terms of climate change, social inequality, and security. Not only do such deficit and debt targeting rules spell austerity for many EU member-states, they also stand to aggravate social problems and increase political discontent. Legitimacy, so much in question during the Eurozone crisis, is likely again to be at risk.  So how can EU governance be made fit for purpose?  That is the focus of this talk, which will review EU economic governance during the Eurozone and Covid-19 and then consider the flaws of the current reform before discussing potential remedies.