Hostname: page-component-586b7cd67f-g8jcs Total loading time: 0 Render date: 2024-11-30T23:15:30.511Z Has data issue: false hasContentIssue false
  • English
  • Français

Italy and the Fiscal Compact: Why does a country commit to permanent austerity?

Published online by Cambridge University Press:  05 July 2017

Manuela Moschella Open the ORCID record for Manuela Moschella [Opens in a new window]
Manuela Moschella*
Affiliation:
Institute of Social Sciences and Humanities, Scuola Normale Superiore, Firenze, Italy
*
*E-mail: [email protected]
Get access

Abstract

The paper investigates the factors that led the Italian government to accede to the Fiscal Compact in spite of its demanding requirements for the country’s budgetary policy. Specifically, the paper assesses the extent to which Italian government’s support for the Fiscal Compact was driven by the logic of the ‘vincolo esterno’ in a replication of the pattern that led Italy to sign the Maastricht Treaty. The paper finds only limited support to the ‘vincolo esterno’ argument. Rather than being motivated by domestic dysfunctions or socialization to the fiscal discipline doctrine, the Italian government acted mainly out of market punishment fears. Interestingly, however, three factors filtered such external pressures and contributed shaping government’s support for the new Treaty. First, the Economic and Monetary Union unfinished architecture, and in particular the lack of a European financial firewall, weakened opposition to the new Treaty. That is to say, the institutional context constrained the choices that Italian policymakers could pursue. Second, the pro-European orientations of government members contributed to elevating the new Treaty to a symbol of European integration. Finally, the Italian government confronted a quite large domestic win-set during the negotiations, as the parties supporting the Monti government also supported Italy’s participation to the new Treaty.

Keywords

ItalyFiscal Compactinternational economic negotiationsEurozone crisis
Type
Research Article
Information
Italian Political Science Review / Rivista Italiana di Scienza Politica , Volume 47 , Special Issue 2: Special issue: Italian Foreign Policy: To Take Arms against a Sea of Troubles? , July 2017 , pp. 205 - 225
Copyright
© Società Italiana di Scienza Politica 2017 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Allard, C., J.C., P.K. Brooks F. Bornhorst, Bluedorn, F. Ohnsorge, K. Christopherson and Poghosyan, T. (2013), ‘Toward a fiscal union for the Euro area’. IMF Staff Discussion Note SDN/13/09, Washington DC: International Monetary Fund.Google Scholar
Andrews, D.M. (1994), ‘Capital mobility and state autonomy: toward a structural theory of international monetary relations’, International Studies Quarterly 38(2): 193–218.CrossRefGoogle Scholar
Baldwin, R. and Giavazzi, F. (eds) (2015), The Eurozone Crisis: A Consensus View of the Causes and a Few Possible Solutions, London: Centre for Economic Policy Research (CEPR).Google Scholar
Bosco, A. and McDonnell, D. (2012), ‘The Monti government and the downgrade of Italian parties’, Italian Politics 27(1): 37–56.Google Scholar
Bull, M. and Rhodes, M. (1997), ‘Between crisis and transition: Italian politics in the 1990s’, West European Politics 20(1): 1–13.Google Scholar
Ceccarini, L., Diamanti, I. and Lazar, M. (2012), ‘The end of an era: the crumbling of the Italian party system’, Italian Politics 27(1): 57–77.CrossRefGoogle Scholar
Cohen, B.J. (1996), ‘Phoenix risen: the resurrection of global finance’, World Politics 48(2): 268–296.Google Scholar
Conti, N. and Memoli, V. (2010), ‘Italian parties and Europe: problems of identity, representation and scope of governance in the Euromanifestos (1989–2004)’, Perspectives on European Politics and Society 11(2): 167–182.Google Scholar
Conti, N. and Verzichelli, L. (2013), ‘Europeanisation and partisan structure in Italy’, in E. Külahci (ed.), Europeanisation and Party Politics, Colchester: ECPR Press, pp. 55–76.Google Scholar
Culpepper, P.D. (2014), ‘The political economy of unmediated democracy: Italian austerity under Mario Monti’, West European Politics 37(6): 1264–1281.Google Scholar
De Grauwe, P. and Ji, Y. (2012), ‘Mispricing of sovereign risk and macroeconomic stability in the Eurozone’, JCMS: Journal of Common Market Studies 50(6): 866–880.Google Scholar
Dellepiane-Avellaneda, S. (2015), ‘The political power of economic ideas: the case of “expansionary fiscal contractions”’, The British Journal of Politics & International Relations 17(3): 391–418.CrossRefGoogle Scholar
Di Virgilio, A. and Radaelli, C.M. (2013), ‘Introduction: the year of the external podestà’, Italian Politics 28: 37–57.Google Scholar
Drezner, D.W. (2001), ‘Globalization and policy convergence’, International Studies Review 3(1): 53–78.Google Scholar
Dyson, K. and Featherstone, K. (1996), ‘Italy and EMU as a “Vincolo Esterno”: empowering the technocrats, transforming the state’, South European Society and Politics 1(2): 272–299.Google Scholar
Dyson, K. and Featherstone, K. (1999), The Road to Maastricht: Negotiating Economic and Monetary Union, Oxford: Oxford University Press.Google Scholar
Edwards, M.S. (2006), ‘Signaling credibility? The IMF and catalytic finance’, Journal of International Relations and Development 9(1): 27–52.Google Scholar
Eichengreen, B. and Panizza, U. (2014), ‘A surplus of ambition: can Europe rely on large primary surpluses to solve its debt problem?’ London, CEPR Discussion Paper No. 10069.Google Scholar
Emmott, B. (2015), ‘Europe’s confused attitude to German leadership’. Financial Times, 21 July.Google Scholar
Evans, P. (1997), ‘The eclipse of the state? Reflections on stateness in an era of globalization’, World Politics 50(1): 62–87.Google Scholar
Ferrera, M. and Gualmini, E. (1999), Salvati dall’Europa, Bologna: Il Mulino.Google Scholar
Financial Times. 2011. ‘Shape of Eurozone deal emerges’. 2 December, online version.Google Scholar
Fondazione, H. (2016), ‘La vulnerabilità dei conti pubblici italiani’. Il Sole 24 ore. Retrieved 27 June 2016 from http://www.ilsole24ore.com/art/generico/2016-09-18/dossier_fondazione_hume_vulnerabilita_conti_pubblici_20160918_160601.shtml?uuid=ADztYXMB.Google Scholar
Garrett, G. (1998), ‘Global markets and national politics: collision course or virtuous circle?’, International Organization 52(4): 787–824.Google Scholar
Garrett, G. and Lange, P. (1991), ‘Political responses to interdependence: what’s “left” for the left?’, International Organization 45(4): 539–564.Google Scholar
Goodman, J.B. and Pauly, L.W. (1993), ‘The obsolescence of capital controls? Economic management in an age of global markets’, World Politics 46(1): 50–82.Google Scholar
Gray, J. (2009), ‘International organization as a seal of approval: European Union accession and investor risk’, American Journal of Political Science 53(4): 931–949.Google Scholar
Heipertz, M. and Verdun, A. (2010), Ruling Europe: The Politics of the Stability and Growth Pact, Cambridge: Cambridge University Press.Google Scholar
Helgadóttir, O. (2015), ‘The Bocconi boys go to Brussels: Italian economic ideas, professional networks and European austerity’, Journal of European Public Policy 23(3): 392–409.Google Scholar
International Monetary Fund (IMF) (2012), ‘Euro area policies: 2012 Article IV consultation—selected issues paper’. Washington DC, IMF Country Report No. 12/182.Google Scholar
Jones, E. (2012), ‘The JCMS annual review lecture’, JCMS: Journal of Common Market Studies 50: 53–67.Google Scholar
Jones, E. (2017), ‘Relations with Europe: beyond the Vincolo Esterno’, Politica in Italia, Bologna: Istituto Cattaneo.Google Scholar
Marchesi, S. and Thomas, J.P. (1999), ‘IMF conditionality as a screening device’, Economics Journal 109(454): 111–125.Google Scholar
Matthijs, M. and Blyth, M. (eds) (2015), The Future of the Euro, Oxford: Oxford University Press.CrossRefGoogle Scholar
McDonnell, D. and Valbruzzi, M. (2014), ‘Defining and classifying technocrat-led and technocratic governments’, European Journal of Political Research 53(4): 654–671.Google Scholar
Moavero, E.M. (2012), ‘Comunicazioni del Ministro per gli Affari Europei sulle propsetive dei negoziati tra gli stati membri dell’Unione Europea relativamente al progetto di Trattato sulla Stabilità, il Coordinamento e la Governance nell’Unione Ecnomica e Monetaria (c.d. “Fiscal compact”)’. Commissioni Riunite e Congiunte del Senato della Repubblica e della Camera dei Deputati, 19 gennaio.Google Scholar
Monti, M. (2011a), ‘Il podestà forestiero’. Corriere della sera, 7 August, online version.Google Scholar
Monti, M. (2011b), ‘Troppo timidi per crescere’. Corriere della sera, 3 July, online version.Google Scholar
Monti, M. (2012a), ‘Discorso al Parlamento Europeo di Strasburgo’. 15 febbraio.Google Scholar
Monti, M. (2012b), ‘Gli sviluppi recenti e le prospettive della politica europea’. Informativa alla Camera dei Deputati, 12 gennaio.Google Scholar
Monti, M. (2012c), ‘Intervento alla conferenza “I protagonisti italiani all’estero”’. Villa Madama, 16 aprile.Google Scholar
Monti, M. (2012d), ‘Interview with the Financial Times’. Financial Times, 18 January.Google Scholar
Monti, M. (2012e), ‘La politica europea’. Intervento in Senato, 25 gennaio.Google Scholar
Moschella, M. (2011), ‘Different varieties of capitalism? British and Italian policies in response to the sub-prime crisis’, Comparative European Politics 9(1): 76–99.Google Scholar
Moschella, M. (2016), ‘Negotiating Greece. Layering, insulation, and the design of adjustment programs in the Eurozone’, Review of International Political Economy 23(5): 799–824.Google Scholar
Münchau, W. (2014), ‘Renzi needs to muster Euro allies for Italian rescue’. Financial Times, 1 June.Google Scholar
Pedrazzani, A. and Pinto, L. (2013), ‘Pro and anti EU attitudes in legislative debates over fiscal compact and ESM?’. Paper presented at the ECPR General Conference 2013, September 4–7, Bordeaux.Google Scholar
Pierdominici, L. (2014), ‘A multi-level legal analysis of Economic and Monetary Union’. European University Institute. Retrieved on 3 May 2016 from http://eurocrisislaw.eui.eu/country/italy/topic/fiscal-compact/.Google Scholar
Putnam, R.D. (1988), ‘Diplomacy and domestic politics: the logic of two-level games’, International Organization 42(3): 427–460.Google Scholar
Quaglia, L. (2004), ‘Italy’s policy towards European monetary integration: bringing ideas back in?’, Journal of European Public Policy 11(6): 1096–1111.Google Scholar
Radaelli, C.M. (2002), ‘The Italian state and the Euro: institutions, discourse, and policy regimes’, in K. Dyson (ed.), European States and the Euro: Europeanization, Variation, and Convergence, Oxford: Oxford University Press, pp. 212–237.Google Scholar
Rickard, S.J. and Caraway., T.L. (2014), ‘International negotiations in the shadow of national elections’, International Organization 68(03): 701–720.Google Scholar
Ross, M.H. (2009), ‘Culture in comparative political analysis’, in M.I. Lichbach and A.S. Zuckerman (eds), Comparative Politics. Rationality, Culture, and Structure. Second Edition, Cambridge: Cambridge University Press, pp. 134–161.Google Scholar
Sacchi, S. (2015), ‘Conditionality by other means: EU involvement in Italy’s structural reforms in the sovereign debt crisis’, Comparative European Politics 13(1): 77–92.Google Scholar
Schmidt, V. and Gualmini, E. (2013), ‘The political sources of Italy’s economic problems: between opportunistic political leadership and pragmatic, technocratic leadership’, Comparative European Politics 11(3): 360–382.Google Scholar
Schwarzer, D. (2015), ‘Building the euro area’s debt crisis management capacity with the IMF’, Review of International Political Economy 22(3): 599–625.Google Scholar
Simmons, B.A., Dobbin, F. and Garrett, G. (2006), ‘Introduction: the international diffusion of liberalism’, International Organization 60: 781–810.CrossRefGoogle Scholar
Stolfi, F. (2013), ‘Back in Europe? Italy, the Troika, and the Chancelleries’, Italian Politics 28: 173–187.CrossRefGoogle Scholar
Tsebelis, G. and Hahm, H. (2014), ‘Suspending vetoes: how the euro countries achieved unanimity in the fiscal compact’, Journal of European Public Policy 21(10): 1388–1411.Google Scholar
Wall Street Journal. 2012.‘Italy pushes for Europe growth policy’. 8 February, online version.Google Scholar
Zoli, E. (2013), ‘Italian sovereign spreads: their determinants and pass-through to bank funding costs and lending conditions’. Washington DC, IMF Working Paper No. WP/13/84.Google Scholar
Supplementary material: File

Moschella supplementary material

Appendix

Download Moschella supplementary material(File)
File 120.1 KB