The post-crisis overhaul of European Economic Governance: A sociological institutionalist approach

The financial crisis of 2007-2009 triggered a long reform process that led to an unprecedented centralisation of fiscal and macroeconomic policymaking in the European Economic and Monetary Union (EMU) and the abandonment of the pre-existing model of weak economic coordination. The reform of European Economic Governance (EEG) between 2010 and 2013 comprised three major legislative initiatives, the Six-Pack, the Two-Pack and the Fiscal Compact. This thesis examines the post-crisis institutional evolution of the EMU’s economic pillar asking how the Eurozone member states decided to proceed to the post-crisis overhaul of the framework of Economic Governance. To answer this question, the thesis turns to the unique social environment of the Eurozone examining the social constitution of actor preferences. Following the theoretical framework of Sociological Institutionalism, the thesis focuses on the evolution of EMU’s system of meaning, namely the “Sound Money” economic policy paradigm, to explore the endogenous aspect of policy change. The central argument is that the emergence of institutions-based discipline as a core economic policy belief of the post-crisis EMU legitimised the strengthening of economic coordination as an organisationally superior form. Through the use of process tracing and organisational discourse analysis, the adopted policy arrangements are linked to particular mechanisms creating new meaning within the EMU. The analysis of EMU’s social environment relies extensively on primary data collected through the method of elite interviewing of high-ranking officials participating in the influential Economic and Financial Committee. The thesis primarily contributes to the literature on the post-crisis fiscal governance of the EMU by advancing a sociological account of change that prioritises structure over agency.