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At cross-purposes: commercial versus technocratic governance of sovereign debt in the EU

Barta, Zsofia and Schelkle, Waltraud ORCID: 0000-0003-4127-107X (2015) At cross-purposes: commercial versus technocratic governance of sovereign debt in the EU. Journal of European Integration, 37 (7). pp. 833-846. ISSN 0703-6337

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Identification Number: 10.1080/07036337.2015.1079377


A perennial problem for fiscal governance in the euro area has been the lack of support from markets. Far from disciplining budgetary policies, capital flows financed deficits at historically low interest rates even when they broke EU fiscal rules. Theory would lead us to expect that the international-commercial and the supranational-technocratic assessments of sovereign debt are fairly aligned. But they were not. We show that credit rating agencies (CRAs) and Eurostat have rather different assessments of what certain policies mean for sovereign debt: the privatization of state-owned enterprises, pension reforms and more recently bank rescue programs. These assessments reveal divergent approaches. Private agencies are prone to conformism and herding behavior, allowing for little consistent discipline, while the public agency follows a bureaucratic imperative of accountability and transparency, which gets in the way of evolving policy priorities. Our findings thus shed light on the difficulties of fiscal governance by regulation only.

Item Type: Article
Official URL:
Additional Information: © 2015 Taylor & Francis
Divisions: European Institute
Subjects: J Political Science > JN Political institutions (Europe)
Date Deposited: 21 Apr 2015 13:40
Last Modified: 20 Sep 2021 02:57

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