One of the main novelties of the post-crisis socio-economic governance framework is the Macroeconomic Imbalance Procedure (MIP) for detecting, preventing and correcting imbalances in the economies of the EU. The new institutional set up of the EMU has sparked wide academic debate, most notably on its lack of legitimacy. Yet, the mechanisms governing the MIP still remain somewhat unexplored. The MIP is distinctive in the sense that it introduces more hierarchical and binding elements to a policy environment that has long been characterized by soft coordination, most notably by its inclusion of a sanction procedure in case of repeated non-compliance. However, with the application of sanctions only likely in exceptional circumstances the exact nature of intrusiveness remains ambiguous. Analysing the degree of intrusiveness in the procedure is important, given the fact that - contrary to the fiscal rules - the MIP does not contain quasi-automatic trigger indicators, but is rather based on a holistic assessment of economic developments. Accordingly, the procedure leaves considerable political discretion up to the Commission, a coercive and prescriptive use of the procedure could thus trigger legitimacy concerns.
To explore the level of policy prescriptiveness this article uses a qualitative content analysis on all MIP recommendations between 2012 and 2015 on the housing sector, as a key economic issue, and on labour market flexibility, as a key social issue. The second part uses process tracing over the same period on two hard cases in each field, the Dutch housing market and French labour law, to explore the nature of coerciveness. On the basis of this analysis the article hopes to shed some light on the assumptions underlying the legitimacy concerns.
