Edited by Herwig C.H. Hofmann, Katerina Pantazatou and Giovanni Zaccaroni
Chapter 4: European economic constitution: from soft to hard policy coordination?
The crisis that the Union and the euro area have been experiencing since 2008 has made it possible to judge the flexibility of the EMU framework. Its resolution made innovations hitherto ignored or rejected politically possible. In the economic pillar of the EMU, the lack of constitutional change to date has not prevented a remarkable transformation of the framework of the coordination of economic policies and specifically of their budgetary components. The new European economic governance, which has been taking shape since spring 2010, has transformed what was previously ‘soft’ or ‘minimum’ coordination into ‘strong’ or ‘maximum’ coordination. Three examples illustrate this strengthening of the framework for the budgetary policies: the move from a quantitative budgetary indicator to a qualitative indicator, the move from ex post to ex ante coordination, and the move from vertical to horizontal coordination (i.e. the ‘Euro area fiscal stance’). It remains to be seen whether this evolution opens the way for a more radical change in the European economic constitution.
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