Fiscal solidarity: The conditional role of political knowledge
| Author | Klaus Armingeon |
| DOI | 10.1177/1465116520967752 |
| Published date | 01 March 2021 |
| Date | 01 March 2021 |
| Subject Matter | Articles |
Article
Fiscal solidarity: The
conditional role of
political knowledge
Klaus Armingeon
Department of Political Science, University of Zurich,
Zurich, Switzerland; Department of Sociology and Social
Research, University of Trento, Trento, Italy
Abstract
In order to cope with the economic fall-out from the COVID-19 pandemic, the EU
countries hit hardest by the virus requested fiscal support from the other EU member
states. Likewise, the Eurozone arguably depends on some form of a fiscal union. This
international redistribution critically depends on citizens’ support. Do politically knowl-
edgeable citizens develop preferences for fiscal redistribution that are different from
those of ignorant citizens? Based on the 2014 European Election Study, this article
argues that knowledge plays a limited and conditional role. It hardly exerts a systematic
independent effect. Rather, it helps crystallize party cues and basic European integration
values. My findings are consistent with a theory, according to which knowledge eases
the process of rationalizing preferences that originate in previous basic orientations.
Keywords
Eurozone, fiscal union, political knowledge, solidarity
Introduction
When the COVID-19 pandemic hit the European Union (EU) and proceeded to
cause major economic challenges, national governments continued their bitter
battles for fiscal redistribution. The ‘frugal’ Northern countries were very reluctant
Corresponding author:
Klaus Armingeon, Department of Political Science, University of Zurich, Affolternstrasse 56, 8050 Zu¨rich,
Switzerland.
Email: armingeon@ipz.uzh.ch
European Union Politics
2021, Vol. 22(1) 133–154
!The Author(s) 2020
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DOI: 10.1177/1465116520967752
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to increase the EU budget particularly if international redistribution implied
unconditional grants instead of loans linked to requests for structural reforms.
In contrast, the countries hit hardest by the virus, such as Italy, requested generous
solidarity without strings attached. In July 2020, after lengthy discussions, the
European Council agreed on some form of fiscal redistribution. These events mir-
rored a situation of almost ten years ago, when national governments were forced
to choose between a bail-out of crisis countries and the dissolution of the
Eurozone. Given that Eurozone countries’ economic structures remain very dif-
ferent and their levels of competitiveness vary dramatically (Copelovitch et al.,
2016; Scharpf, 2013b, 2014), a budgetary union arguably has to support the struc-
turally weak economies with fiscal transfers (cf. De Grauwe, 2016). Even if we
assume that a monetary union may work within a non-optimal currency area
without fiscal redistribution (Schelkle, 2017), fiscal transfers may mitigate opposi-
tion to the implications of a common currency in countries in crisis. This is why a
fiscal union – defined as sufficient common resources for common problems
(Fabbrini, 2020) – has become an important EU politics issue since the Great
Recession. Given the structural problems of the EU area and the economic con-
sequences of the Coronavirus pandemic, conflicts over international redistribution
will most likely rank high on the EU agenda in the future, too.
Such a fiscal union or such fiscal solidarity needs political legitimacy. Citizens
have to agree that European monetary integration, which entails major transfers
from one country to another, is a positive or, at least, an almost unavoidable
project. Many democratic nation states feature similar fiscal unions with interre-
gional redistribution in favor of structurally weak regions or in favor of regions hit
by natural or other disasters. There, unions are based on a common national
identity and on legitimate political institutions establishing transfer rules.
However, arguably, EU citizens lack a robust and strong common identity (for
a critical account, see Gerhards et al., 2020; Risse, 2010). At the very least, the
European identity is not strong enough to make the German populace feel that its
European ‘compatriots’ in Greece deserve generous transfers from German tax-
payers’ money. Even in the height of the pandemic, when Italy was hit particularly
hard due to sheer bad luck, Dutch politicians pondered whether support should be
made conditional on structural reforms. In addition, the EU also lacks a broad tax
base and a parliament with the power and legitimacy to raise and distribute sub-
stantial parts of national social products. It also lacks democracy and efficient
elected European politicians (Follesdal and Hix, 2006). Hence, the fiscal union
epitomized, for example, by the European Stability Mechanism (ESM) has very
limited means – insufficient to bail out a country as large as Italy – and a very weak
legitimacy base (Scharpf, 2013a). The fiscal union emerging after the COVID-19
crisis still needs the approval of both the European and national parliaments.
Fiscal solidarity is, therefore, highly fragile. The extent of its fragility is a direct
function of political actors’ and their electorates’ tacit support and the absence of
open opposition to it.
134 European Union Politics 22(1)
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