Literal compliance with EU fiscal policy: why the unlikely happens

Research on member state compliance with EU policies focuses on the question of whether or not national laws and policies are congruent with the intentions of the EU rules. However, a growing body of evidence on ‘customisation’ of EU policies shows that even if member states comply with EU law, they interpret and adapt it during transposition, leading to significant differences in regulatory density and restrictiveness. Thus, the ‘ideal type’ of literal compliance, where EU rules are adopted virtually with no changes, is both rare and, we argue, improbable. But why do EU member states engage in literal compliance? We analyze this question in the ‘unlikely’ case of transposition of the EU’s Fiscal Compact, where customised implementation is crucial for member states to ‘regain control’ over a core state power. Literal compliance is modelled as the interplay of factors pertaining to the (lack of) internal need to change an EU policy and the external pressure to not change that policy. We analyze empirically the transposition of six fiscal treaty rules in three countries (France, Germany, and Italy) (N=18) using fuzzy-set Qualitative Comparative Analysis. Our study moves the field forward by zooming in on the hitherto neglected phenomenon of literal compliance and analyzing customisation of EU treaty (as opposed to secondary) law.