Negotiating Fiscal Space in the Second Decade of the Euro

Camilla Locatelli

The second decade of the euro has been marked by multiple crises that put European welfare states under pressure. Tensions led to a push for deeper economic integration and resulted in an increased involvement of European institutions in national fiscal policy-making. The renewed participation of EU institutions has transformed the field where fiscal policy decisions are taken into a new ecosystem that involves national and supranational actors. This configuration has been marked by pressures for consolidation that, despite common trends, have resulted in different combinations of financing and spending strategies across euro area member states. The dissertation project offers a better theoretical understanding and empirical investigation of the new euro area fiscal ecosystem dynamics. It investigates how national fiscal politics across different contexts has integrated forms of external pressure. The study relies on a mixed-methods design: through a quantitative descriptive part, it offers an overview of the evolution of public finances across euro area countries. A qualitative comparative case study deepens the analysis by delving into the inner workings of national fiscal policy-making in this new multilevel institutional setting.