Influence of the European Semester on national public sector reforms under conditions of fiscal consolidation: The policy of conditionality in Italy 2011–2015
| Author | Fabrizio Di Mascio,Francesco Stolfi,Edoardo Ongaro,Alessandro Natalini |
| DOI | 10.1177/0952076718814892 |
| Published date | 01 April 2020 |
| Date | 01 April 2020 |
| Subject Matter | Special Issue Articles |
Special Issue: Public Sector Reforms in a Changed EU Governance under Conditions of Fiscal Consolidation
Influence of the European
Semester on national
public sector reforms
under conditions of fiscal
consolidation: The policy
of conditionality in
Italy 2011–2015
Fabrizio Di Mascio
University of Turin, Turin, Italy
Alessandro Natalini
Parthenope University of Naples, Naples, Italy
Edoardo Ongaro
The Open University Business School, The Open University, UK
Francesco Stolfi
Macquaire University, Sydney, Australia
Abstract
This article applies the Schimmelfennig and Sedelmeier ‘‘governance by conditionality’’
framework to public sector reform in a European Union (EU) country subject to impli-
cit rather than explicit conditionality in the context of severe fiscal consolidation. It
analyses the reform programmes of the governments that alternated in power in Italy
over 2011–2015, focusing on three major areas of public sector reform – fiscal con-
solidation, labour market reform and liberalization – in the context of the Country-
Specific Recommendations–National Reform Plan (CSR-NRP) cycle. We show that the
EU has influenced governance (budget institutions and the governance structure of the
NRP process) as well as the content of reforms. These results are consistent with the
Schimmelfennig and Sedelmeier framework regarding the importance of external incen-
tives in explaining adoption and implementation of reforms. Our findings confirm not
only the importance of material conditions and their credibility in explaining the fit
Public Policy and Administration
2020 Vol. 35(2) 201–223
!The Author(s) 2019
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DOI: 10.1177/0952076718814892
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Corresponding author:
Fabrizio Di Mascio, University of Turin, Castello del Valentino, Viale Mattioli 39, Turin 10125, Italy.
Email: fabrizio.dimascio@unito.it
between EU recommendations and domestic reforms, but also the significance of the
strategic usage of Europe by domestic policy makers, which has become more import-
ant as the legitimacy of the EU has decreased among voters. We conclude with some
reflections on the implications of our research for the ongoing debate on the reform of
the European Semester, in particular with regard to the question of how to ensure a
higher fit between EU recommendation and domestic policies.
Keywords
Austerity, Europeanization, Euroscepticism, fiscal governance, policy coordination,
sovereign debt crisis
Introduction
This contribution assesses the influence of the European Union (EU) on public
sector reforms under conditions of fiscal consolidation. Since the interconnected
financial, economic and fiscal crises hit across Europe in 2008–2010, several coun-
tries have been subject to pressures from the EU to implement more or less tightly
formulated prescriptions in matters of organisation of the public sector. Whilst
these pressures are evident in countries that were directly – like Greece, Ireland
and Portugal – bailed out and the impact of conditionality on these countries has
been extensively studied (Hick, 2018; Theodoropoulou, 2015; Zahariadis, 2017),
much less is known about the impact of implicit conditionality in countries that
were not formally bailed out but whose financial and economic difficulties have
made them especially susceptible to EU-level rewards (Sacchi, 2015).
The crisis of 2008–2010 gave impetus to major institutional changes in EU
governance: the so-called Six Pack (five regulations and one directive, 2011), the
Fiscal Compact (2012) and the Two Pack (two regulations, 2013), aiming to
enhance the coordination and surveillance of the fiscal and economic policies of
the EU Member States, and especially of those that have adopted the Euro
(Dehousse, 2016; Laffan and Schlosser, 2016). The Six Pack strengthened the
Stability and Growth Pact (SGP) on fiscal governance and introduced the
Macroeconomic Imbalance Procedure (MIP) covering several areas of economic
governance such as private debt, export performance and unemployment. Both the
SGP and the MIP provide for enhanced surveillance and potentially financial sanc-
tions for Eurozone countries not meeting their requirements. The Fiscal Compact,
applying to Eurozone countries only, committed these countries to strengthening
their budgetary institutions and to introducing a balanced budget clause, prefer-
ably with constitutional legislation. With the Two Pack, Eurozone members com-
mitted to further reporting requirements and the coordination of their fiscal
policies.
All these new measures, plus the pre-existing Europe 2020 strategy for
achieving targets on unemployment, climate change, poverty, education and
research and development have been integrated into the European Semester
202 Public Policy and Administration 35(2)
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