Keep It Complex! Prodi’s Curse and the EU Fiscal Governance Regime Complex

Fickle Formulas Working Paper 04-2021

24 Pages Posted: 20 Apr 2022

Date Written: July 9, 2021

Abstract

The EU fiscal framework has gradually morphed into a regional regime complex through various reforms of the preventive and corrective arms of the Stability and Growth Pact. A regime complex encourages actors to arbitrage between partially overlapping, parallel and nested rules. By drawing on this central insight, this article demonstrates that regime complexity enables member states to respect the letter but not the spirit of the fiscal rules to lower the cost of compliance. It further shows empirically how regime complexity weakens technocratic enforcement capacity when authority is dispersed across multiple levels of governance by focusing on the example of the general escape clauses during the coronavirus pandemic.

Keywords: EU fiscal governance, Stability and Growth Pact, fiscal rules, euro area, regime complexity, European Commission

JEL Classification: H3, H4, H5, H6, H7, P48, E62

Suggested Citation

Tesche, Tobias, Keep It Complex! Prodi’s Curse and the EU Fiscal Governance Regime Complex (July 9, 2021). Fickle Formulas Working Paper 04-2021, Available at SSRN: https://ssrn.com/abstract=4062120 or http://dx.doi.org/10.2139/ssrn.4062120

Tobias Tesche (Contact Author)

University of Amsterdam ( email )

Roetersstraat 11
Amsterdam, NE 1018 WB
Netherlands

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