Taming the European Parliament: How Member States Reformed Economic Governance in the EU

Abstract

This paper aims to assess the role of the European Parliament (EP) in the recent reforms of the EU’s economic governance. It shows that, despite the post-Lisbon communitarisation of the EMU policy-making, the impact of the EP was limited. Based on original interview data and a wealth of primary and secondary sources, it reveals that the EP was only able to produce limited ‘first-order changes’ (i.e., adjustments to the details of the policy regime), whereas it had almost no influence on the goals and instruments of the EMU. The paper argues that the limited influence of the EP can be explained by the dominant role member states (still) play in the EMU. They defined the ‘policy core’ of economic and budgetary policies (in terms of sound public finances and low inflation) before the upgrade of the EP’s powers with the Lisbon treaty, and using several strategies they defended it successfully in the post-Lisbon context. The paper reviews the key policies adopted by the EU to tackle the crisis – from the reform of the Stability and Growth Pact to legislation on the Banking Union – and identifies five strategies through which the Council (often in tandem with the Commission) successfully managed to curb the influence of the EP.