Waiting at the grave: Explaining the continual post-COVID-19 suspension of the European Union’s Stability and Growth Pact

This paper investigates the causes behind the continual suspension of the European Union’s (EU) Stability and Growth Pact (SGP) under its general escape clause (GEC) throughout the period of 2020-2023. The GEC was triggered in March of 2020 on the recommendation of the European Commission to give member states fiscal room to cope with the COVID-19 pandemic, but has remained in place for over three years, despite the subsiding of pandemic emergency measures, restored levels of economic activity, and the repeated recommendations and predictions from numerous European institutions that the rules were to be reinstated at the end of 2022 by the very latest. With the emergence of a legislative proposal from the European Commission to reform the SGP’s rules, questions have emerged from journalistic endeavours and academic literature as to the purpose of the extended suspension. This paper utilises explaining-outcome process-tracing as described by Beach and Pedersen (2013) to compare the...Show moreThis paper investigates the causes behind the continual suspension of the European Union’s (EU) Stability and Growth Pact (SGP) under its general escape clause (GEC) throughout the period of 2020-2023. The GEC was triggered in March of 2020 on the recommendation of the European Commission to give member states fiscal room to cope with the COVID-19 pandemic, but has remained in place for over three years, despite the subsiding of pandemic emergency measures, restored levels of economic activity, and the repeated recommendations and predictions from numerous European institutions that the rules were to be reinstated at the end of 2022 by the very latest. With the emergence of a legislative proposal from the European Commission to reform the SGP’s rules, questions have emerged from journalistic endeavours and academic literature as to the purpose of the extended suspension. This paper utilises explaining-outcome process-tracing as described by Beach and Pedersen (2013) to compare the expectations and assumptions of varying theories, particularly the “failing forward” theory of Jones et al., (2016) to investigate and explain the European Commission’s decision-making in the case of the SGP’s continual suspension. It concludes that the continual suspension can be minimally explained by ongoing reform efforts by the European Commission, in line with the theoretical expectations of Jones et al. and the findings of Schön-Quinlan and Sciponi (2017). It cannot rule out that the escalation of the Russo-Ukrainian War, and the economic knock-on effects, played a part in the decision for continual suspension. The findings of this paper have implications for understanding the European Commission as a fiscal actor in an economic crisis, and understanding the relevance of particular theories of European integration to the historical context of the COVID-19 pandemic.Show less

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Waiting at the grave: Explaining the continual post-COVID-19 suspension of the European Union’s Stability and Growth Pact