Chasing Maastricht: The Impact of the Emu on the Fiscal Performance of Member States

Abstract

This paper examines the impact of the Economic and Monetary Union (EMU) on the fiscal performance of EU member states. I will show that the process towards EMU and the accompanying Stability and Growth Pact (SGP) have increased fiscal performance in the EU member states. Small EU states have generally performed better than big states, because they were more constrained by the institutions of the SGP: During the period of accession, the threat of being excluded from the final stage of EMU was more severe than for the large states in the core of the EU (Germany and France). Second, as members of the EMU, smaller states will encounter higher difficulties in finding allies to avoid punishment through sanctions in the Council.

Keywords: Multilevel governance, non-majoritarian institutions, policy analysis, budget, EMU, European Monetary Union, fiscal federalism, political economy, stability pact, stability and growth pact, fiscal policy, political science, economics, EIoP