@article{2557b74611ed4b959d1386b5bd5479f7,
title = "Too big to fail? The dynamics of EU influence and fiscal consolidation in Italy and Spain (2008–2016)",
abstract = "The article studies the dynamics of fiscal consolidation and public sector reforms in Italy and Spain under the EU governance that took shape as a reaction to the Eurozone crisis. We show how three types of EU pressure–fiscal and economic coordination rules, conditionality, and back-room diplomacy have operated in conjunction. We also show that Italy was more willing than Spain to resist EU pressure. Based on a Two-Level Game framework, we argue that this can be explained by the greater opposition to European integration that has developed in Italy compared to Spain.",
keywords = "European Semester, austerity, conditionality, cutback management, fiscal retrenchment, sove-reign debt crisis",
author = "Diego Badell and {Di Mascio}, Fabrizio and Alessandro Natalini and Edoardo Ongaro and Francesco Stolfi and T. Ysa",
note = "Funding Information: However, consolidation measures were adopted in vain since the banking crisis worsened and turned into a severe sovereign debt crisis. In early June 2012, the Rajoy government called for the financial rescue of Spanish banks by European partners. The executive was able to avoid the humiliation of a full bail-out and no macroeconomic conditionality was attached to the financial assistance for the recapitalization of Spanish banks (see section on implicit conditionality in Spain). In parallel to the financial assistance programme, Spanish authorities were expected to report on progress made under the EDP and the European Semester on a quarterly basis. Funding Information: Back-room diplomacy also influenced the design of the financial assistance package in 2012. During the negotiation over the Memorandum of Understanding, the Trojka required linking bank recapitalization with macroeconomic conditionality, and it was supported by the majority of the Eurozone members. The Rajoy government rejected this proposal, and it raised the argument of the country{\textquoteright}s economic weight (Spain, Interview Spain #4 and #5). Bailing out an economy of Spain{\textquoteright}s size would have caused a capital increase in the IMF, diluting North-American and European control of the IMF, after a large country like China had joined it. At the G20 Los Cabos meeting in June 2012, the Spanish delegation also spread the rumour that the country could be betteroff outside the EMU (de Guindos 2016). Bilateral negotiation between the Spanish and German governments constituted the solution for getting over the impasse as the two countries agreed on keeping financial sector reform separate from obligations under the EDP and the European Semester (Henning 2017, 141). Publisher Copyright: {\textcopyright} 2019, {\textcopyright} 2019 Informa UK Limited, trading as Taylor & Francis Group.",
year = "2019",
month = sep,
day = "2",
doi = "10.1080/14719037.2019.1618386",
language = "English",
volume = "21",
pages = "1307--1329",
journal = "Public Management Review",
issn = "1471-9037",
publisher = "Taylor and Francis Ltd.",
number = "9",
}