The Influence of Internal Epistemic Actors on the EMU Austerity Paradigm: Lessons from the Eurozone Crisis

The European Union (EU) has responded to the Eurozone crisis of 2010 with an exceptional number of governance and policy innovations. Along with short-term crisis management measures that served the immediate purpose of rescuing the Eurozone vis-à-vis the risks of sovereign defaults and overall collapse (e.g. the establishment of a permanent bail out facility), EU actors have also negotiated and passed various forward-looking reforms meant to guarantee the long-term sustainability of Economic and Monetary Union (EMU) and to fix its alleged asymmetries. This paper looks into three of these forward-looking reforms (namely, the European Semester, the Six-pack rules and the Treaty on Stability on Stability, Coordination and Governance in EMU) through the analytical lens of modes of policy learning. Methodologically, the analysis draws on theory-testing process tracing and aims first at discovering what mechanism of policy learning prevailed during the reform process, and second at evaluating whether the detected, prevalent mode of learning influenced the austerity paradigm underlying the new framework for economic governance. Once having adjudicated the reforms of EMU economic governance to a mode of epistemic learning, the article systematically reviews 70 working, economic and occasional papers published between 2009 and 2012 by the European Central Bank and the DG EcFin of the EU Commission. The key finding is that the new EMU macroeconomic framework and its overarching paradigm (built upon expansionary retrenchment, balanced budget rules and stricter supranational monitoring) have been firmly rooted in the scientific production of the internal epistemic actors of the EU. The conclusion is that these latter acted as final part of a ‘transmission belt’ connecting mainstream economic literature (and its consensus over austerity policies) to EU policy makers.