ABSTRACT
This chapter argues that the Eurozone fiscal governance system is a major increase in European Union (EU) power, but one that perpetuates a regulatory approach to fiscal policy that has historically failed to address the problems of the Euro, and that while fiscal governance can constrain member states it is unlikely to be a credible constraint on overall fiscal policy. It discusses the crisis measures taken by the “troika” in peripheral Eurozone member states, where the EU became involved in extremely intimate domestic policymaking in areas such as healthcare and labour law. The chapter also discusses the EU’s formal, institutional response, which was a block of legislation, an intergovernmental treaty, and a large new apparatus dedicated to making EU fiscal rules more effective by broadening them into more policy areas and increasing the force and automaticity of their punishments.
