Abstract

The European Union fiscal architecture combines hard and soft modes of policy coordination that constitute a complex set of fiscal rules and procedures. Since the crisis, the framework has been heavily unbalanced towards the hard mode creating an increasingly rigid and unwieldy system. Its flaws are rooted in the contradictions of the underlying intergovernmental decision-making regime that was strengthened during the crisis - the «new Union method» - and delivers unsatisfactory compromise decisions that hide important divergences among member states. The collective action problems that follow are dealt with by continuous adjustments and interpretations of the fiscal framework that, however, cannot remedy two main problems of intergovernmentalism: i) the inability to forge an aggregate fiscal policy stance and; ii) the weak legitimacy. If institutions are to grow wiser, they should take stock of the fact that even a more extended or refined architecture cannot remedy to these contradictions that risk jeopardizing the entire construction. Therefore, the current preference for procedural adaptation should be replaced by new original answers that punctually address analytically identified flaws while searching for a common fiscal stance, increased accountability for policy-making and responsiveness to participatory demands for democratic legitimacy.