In person icon The evolution of solidarity in EU fiscal integration

Abstract

Fiscal integration in the EU has been dominated by the attempt to rein in public deficits and debt in member states. Fiscal rules, a no-bailout clause and constraints on the ECB’s monetary policy served this disciplinarian thrust. This has arguably changed since 2008, starting with the ECB’s extraordinary interventions that tried increasingly to support sovereigns while respecting the prohibition of debt monetisation. A bailout fund has been created that dwarfs the IMF. National and collective measures taken during the Covid-19 pandemic went a step further: the fiscal rules were suspended for the first time and a massive redistributive fund created to reduce the debt financing needs of governments in the long recovery from the economic impact of Covid. Solidarity within and between member states, not fiscal discipline, was the justification for this shift in institutional reforms. But how do voters across Europe respond to this change in the thrust of fiscal integration in the EU? Three papers on this panel explore this question. The paper by Hemerijck reports on the latest findings of a survey panel that shows that preferences are not static and solidaristic attitudes may weaken over time. The contribution by Marozzi and Truchlewski asks how we can theoretically explain the evolution of solidarity as the result of preference formation. Bremer et al provide a bridge between these studies of the demand-side of policy-making and the party-political supply side of fiscal integration. Finally, Schelkle looks at the evolution of solidarity from the perspective of institutional development, asking whether the piecemeal reforms add up to a system of fiscal stabilisation. The panel promises to further both our empirical and theoretical understanding of this major construction site of European integration.

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