The New Governance of EU Fiscal Discipline

The European Union has recently adopted two packages of legislative measures with a view to strengthening EU economic governance. In particular, attempts have been made to tighten fiscal discipline and to secure reforms to domestic fiscal frameworks. Rhetorically, these reforms have been framed by the explicit or implicit juxtaposition of on the one hand, a return or revival of rules-based governance through the so-called "Community method", and on the other, the alleged failures or weaknesses of economic governance through policy co-ordination under the "open method". This article suggests an alternative reading of the reforms based on three connected claims. The first is that rules-based governance itself is not monopolised by the legislative activity associated with the Community method. Indeed, there is a pluralisation in the sources and sites of normativity, with extra-EU legal solutions also being sought. The second claim is that rules-based and co-ordination-based forms of EU governance are not locked into a zero-sum relationship in which whatever is gained by one is lost by the other. Indeed, the technique of policy co-ordination exemplified by mechanisms of reporting and monitoring has been diffused and intensified in the packages of reforms, with the "European semester" emerging as the key framework for the co-ordination of co-ordination. The third claim is that rules-based and co-ordination-based forms of governance do not merely co-exist but interact in ways that produce a "hybrid" governance architecture. Through an exploration of reforms to domestic fiscal frameworks, these claims are advanced and evidenced.