Differentiated Fiscal Surveillance and the Democratic Promise of Independent Fiscal Institutions in the Economic and Monetary Union

Stefano Merlo*, Cristina Fasone

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

The post-crisis reforms of the Economic and Monetary Union (EMU) have met with skepticism toward their democratic credentials. This certainly applies to the requirement to set up Independent Fiscal Institutions (IFIs). Drawing on Pettit’s model of republican legitimacy, this paper argues however that IFIs can indirectly increase the democratic character of national fiscal policy while preserving Member States’ autonomy. Such a democratic contribution is further facilitated by nationally differentiated implementation of the EU rules regarding the heterogeneous design and powers of IFIs. Based on a comparative analysis of selected Member States’ “elaboration discretion” in defining the organisation and the mandate of IFIs, the article highlights that these features reflect the variety of constitutional settings at domestic level. It is concluded that this heterogeneity amounts to a form of differentiated integration which allows for a better navigation of the trade-off between the persistence of fiscal policy externalities and the reduction in national autonomy.

Original languageEnglish
Pages (from-to)582-600
Number of pages19
JournalSwiss Political Science Review
Volume27
Issue number3
Early online date19 May 2021
DOIs
Publication statusPublished - Sep 2021

Bibliographical note

Special Issue: Democratic Challenges of Differentiated (Dis)Integration.

Funding Information:
The authors would like to thank the editors of the special issue on ?Democratic Challenges of Differentiated (Dis)Integration? for their guidance and the helpful feedback on previous versions of the manuscript, the anonymous reviewers and Ben Crum for their insightful comments. The usual disclaimer applies.

Publisher Copyright:
© 2021 The Authors. Swiss Political Science Review published by John Wiley & Sons Ltd on behalf of Swiss Political Science Association.

Keywords

  • Differentiated Integration
  • EMU
  • Fiscal Councils
  • Fiscal Surveillance
  • Non-domination

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