The MIP and the Expanded Economic Surveillance of the European Union


CALL: 2015

DOMAIN: SC - Societal Challenges


LAST NAME: Howarth



HOST INSTITUTION: University of Luxembourg

KEYWORDS: Fiscal Policy; Eurostat; European Commission; Europeanisation; Macro-Economic Imbalances Procedure.

START: 2015-08-25

END: 2015-12-31


Submitted Abstract

In the wake of the European financial crisis the European Union enacted a series of rules aimed at strengthening the authority and technical powers of the European Commission to conduct budgetary and macroeconomic surveillance of the Member States. These rules, principally the strengthening of the EC’s statistical and auditing powers and the enactment of the Two-Pack that created the European Semester and the Six-Pack that produced the Macroeconomic Imbalance Procedure (MIP), are well-known. A good deal of analyses has focused on their origins, their contribution to the EU’s legal framework, their potential influence on member state budgetary behaviour, their macroeconomic consequences, and their implications for further European economic integration. The focus of these studies has been directed at the Semester’s requirement that Member States submit their budgetary plans to the Commission for review. What is generally missing from the research is an appreciation for the MIP, and how it may result in an even deeper integration of Member State economic policies in compliance with European Council and Commission directives.The MIP is a surveillance mechanism that aims to identify potential risks, prevent the emergence of harmful macroeconomic imbalances, and correct the imbalances that are already in place. The MIP begins with an Alert Mechanism Report (ARM) that relies upon a scoreboard of eleven indicators. These indicators are much more extensive in scope than the Maastricht Treaty’s convergence criteria that are employed to determine whether a member state qualifies for entry into the Eurozone. The MIP has a preventive and a corrective arm. The latter is made operational by the Excessive Imbalance Procedure, which can eventually lead to sanctions for euro area Member States if they repeatedly fail to meet their obligations.This project, which employs Historical Institutionalism and Principal-Agency theories as the framework of this analysis, examines how the Commission developed the MIP and its indicators, how specifically Eurostat collects, interprets, and evaluates the data required by the indicators, how the Member States are reacting to and complying with this new reporting requirement, and what the implications are for the further “Europeanization” of administrative rules and procedures and European economic integration.

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