Debating Austerity? Party Salience and Positions Towards Fiscal Orthodoxy in the EU

After the Covid-19 pandemic fiscal honeymoon period, economic orthodoxy has regained prominence in the European Union (EU) due to rising national public debt levels and the Stability and Growth Pact reform. Recent literature highlights the role of political elites in shaping debates and public attitudes towards austerity, demonstrating how they influence public opinion through issue salience and issue ownership. The paper offers an original contribution by introducing a text-based party stance approach to the study of fiscal orthodoxy in the EU, enabling a more comprehensive analysis of party positions on fiscal orthodoxy across EU member states. Drawing on parliamentary debates from four EU countries between the early 2000s and 2020, the study employs a transformer-based language model trained on party manifestos to identify and classify party positions on fiscal consolidation. The findings reveal significant variation in party stances across EU countries, shaped not only by national macroeconomic performance but also by the critical role of political elites in shaping the salience of fiscal issues. Moreover, the results highlight nuanced differences among party families in their approaches to budgetary orthodoxy. The study deepens the understanding of party positions on austerity in the EU, offering new insights into the interplay between political dynamics and fiscal policy in the European context.