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Risking the stability of EMU: the asymmetric applicationof the Stability and Growth Pact

Paudyn, Bartholomew (2006) Risking the stability of EMU: the asymmetric applicationof the Stability and Growth Pact. Review of European and Russian Affairs, 2 (1). pp. 5-32. ISSN 1718-4835

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Fiscal profligacy poses a high risk to the credibility of Europe’s common monetary policy and its ultimate objective of price stability. Unfortunately, the aim of preventing fiscally responsible states from being penalized by those with lax budgetary policies via inflationary pressures and interest rates is jeopardized as members breach the Stability and Growth Pact (SGP). Moreover, there are major institutional inconsistencies in how states are treated under the current framework as is exemplified by the November 2003 ECONFIN crisis. What is witnessed is an antagonistic relationship between the programmatic and operational dimensions of monetary governance. Does the fact that half the members who have adopted the euro have also breached its rules signal that surveillance as regulation is being displaced as a mode of governance? It calls for a re-imaged spatial-temporal explanation of governance to adequately capture the political economy of EMU. At the core of EMU management are risk and uncertainty based modes of governing. Employing a governmentality approach, I argue that the audit is one prominent style of processing and institutionalizing risk as an aggregate future of monetary activity. By altering the administration and objects of risk governance the audit is perceived as reducing the susceptibility to failure. Hence, it has a performative function that extends beyond simply measuring deficit or debt to GDP performance and acts as a social and institutional process structuring a homogenous set of fiscal practices.

Item Type: Article
Official URL:
Additional Information: © 2006 Review of European and Russian Affairs
Divisions: International Relations
Subjects: H Social Sciences > HC Economic History and Conditions
J Political Science > JN Political institutions (Europe)
J Political Science > JZ International relations
Date Deposited: 07 Oct 2014 10:10
Last Modified: 15 Sep 2023 13:24

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