Martin Heipertz

The dog that would never bite? What we can learn from the origins of the Stability and Growth Pact

This article analyses the creation of the Stability and Growth Pact. It examines the economic and political factors behind it, including the role of economic ideas, experts, politicians, institutional arrangements in the Maastricht Treaty, domestic politics, and the exceptional position of Germany in the realm of monetary integration. It concludes that a set of commonly held beliefs together with a corresponding power-political constellation explain the creation of the SGP. As these parameters change, they inform our understanding of the current crisis.

The Stability and Growth Pact - Theorizing a Case in European Integration

This article looks at the Stability and Growth Pact (SGP) as a case study in European integration. Applying the theoretical lenses of various European integration approaches (intergovernmentalism, domestic politics, neofunctionalism and an ‘expertocratic’ approach) it seeks to explain the creation of the SGP as well as its subsequent implementation. The findings show that these approaches are able to illuminate different parts of the process. The article thus argues that only an eclectic combination of the approaches provides a satisfactory theoretical explanation of the SGP as a fundamental element of the rules-based economic and monetary union (EMU) regime.

Ruling Europe: Implementation of the SGP in good and in bad times

Introduction Ever since the SGP had been conceptualised it was clear that the proof of the pudding lay in the eating – i.e. the real policy implementation of the framework was key, not the political noise surrounding its inception. Would Member States conduct their fiscal policies in a cooperative way, conducive to sound public finances and monetary stability – or would the fiscal dimension of EMU put either the Member States or the Pact itself under stress? The first years of the implementation of the SGP put the scheme under some pressure right away, but serious difficulties only occurred a few years into its implementation, after the macroeconomic environment had progressively darkened. This part of the book offers an analysis of the first nine years of the implementation period, from 1999 until late 2008. It is structured as follows. The first section of Chapter 6 offers a narrative of the SGP implementation in the period 1999–2002. The second section of this chapter analyses this first implementation period by choosing from our theoretical framework and combining the thrust of the domestic and intergovernmental approaches that best suit this episode. The next two chapters assess respectively the SGP crisis in 2003 and the reform period up to 2005 – again providing analytical assessments informed by the four approaches developed in Part I of the book.