To Tie Each Other’s Hands: Negotiating Balanced Budget Rules and Independent Fiscal Institutions in Italy (2010-2013)

This article presents an in-depth qualitative case study on the negotiations on the introduction of balanced budget rules and Independent Fiscal Institutions in EU member states. The article looks at the interests of the relevant actors in Italy in the negotiation process of the Six Pack, Euro Plus Pact, Fiscal Compact, and Two Pack by conducting interviews to the negotiators and analyses of parliamentary records and press declarations. The article demonstrates that functional mechanisms best explain the outcome of such negotiations. On the contrary, the consolidated literature of Liberal Intergovernmentalism expects that the preferences of the constellation of national actors are the key drivers of EU grand bargains impacting on member states’ core state powers. The results contribute to the academic debate on the integration of the Economic and Monetary Union by testing hypotheses deriving from traditional EU integration and IR literature and paves the way for future research to allow a greater generalisation and the further development of Liberal Intergovernmentalism.