The structural reforms in EU member states: Exploring sanction-based mechanisms

Steinbach, Armin

The structural reforms in EU member states: Exploring sanction-based mechanisms

License

Citation

Steinbach, A. The structural reforms in EU member states: Exploring sanction-based mechanisms. 2016. handle: http://hdl.handle.net/10230/27714

This citation was generated automatically.

Abstract

An insufficient level of structural reforms remains a perennial phenomenon in the EU. Despite the gradual expansion of macroeconomic governance, legal instruments fostering the implementation of structural reforms have been underexploited. This article examines the leeway provided by EU Treaties and legislation to use existing and new instruments to incentivize structural reforms more forcefully. First, in light of the recent change in the EU Commission’s enforcement practice, we highlight how the sanctions-based regime under the Stability and Growth Pact (SGP) can be extended to incorporate structural reforms. There is significant room for manoeuvre to account for the implementation of structural reforms both in the preventive and the corrective arm of the SGP. Second, contractual agreements on structural reforms offer an alternative to the sanction based system. Unlike existing instruments, contractual agreements allow for more egalitarian and reward-based incentives and thus deviate from the classic 'surveillance model' of economic governance in the EU. We can conceptualize such agreements in two ways: First, as agreements concluded between the EU and individual Member States, underpinned by financial support as an incentive. Second, as mutual agreements concluded between Member States, which agree on the implementation of structural reforms as a kind of barter trading ensuring reciprocity. We highlight the legal boundaries on scope and design of such agreements and how they relate to the institutional governance setting in the EU.