The purpose of this paper is to answer to the following research questions: How has European economic governance changed during the years of crisis (2007-2013)? What is the impact of constrained government budgets and their automatic mechanisms of policy-making?
The first part of the paper describes the effects of the reforms of the European fiscal discipline
implemented to date. It analyses the institutional design of the European economic governance, the
principles of the European Semester, the trade-off between rules and politics, their effects on social
responsibilities of the EU, and political participation/representation. Part two discusses four main
paradoxes of the current model of governance and their impact on effectiveness of policies, conditions
of democracy, well-being of person (in terms of socio-economic conditions and political rights), and
equality of member states. The third part challenges the quantitative parameters of finance in the
Fiscal Compact and lays out some proposals to move towards a different governance which does not
tie the hands of policy-makers unconditionally. Finally, the last part of the paper illustrates some
proposals for improving the quality of the model of governance with the Fiscal Reform act and a new
policy analysis model based on the principles of the Institutional social responsibility.
The conclusion summarizes some analytical indications concerning the consequences of the reforms
on the European democracies in terms of representation, political rights, policy effectiveness, and
social contract.
