Enforcing the European Semester: The Politics of Asymmetric Information in the Excessive Deficit and Macroeconomic Imbalance Procedures

The European Semester was created in the wake of the Greek and Euro crises to strengthen and deepen the fiscal and economic coordination of the European Union.  At the center of the Semester is an information-driven surveillance process that relies heavily upon data collected from the member states and analyzed by the European Commission.  This is true for both the Stability and Growth Pack/Excessive Deficit Procedure (EDP) and the Macroeconomic Imbalance Procedure (MIP).  Where the EDP relies on deficit and debt data to determine member state compliance, the MIP is based on eleven "headline" indicators and eighteen "auxiliary" indicators as part of the EU's economic alert mechanism, all of which require credible data to function.  According to the Six Pack, "The availability of fiscal data is crucial to the proper functioning of the budgetary surveillance framework of the Union."  As the Commission states, "Statistics are the backbone of EU economic governance."  This paper examines through a Principal-Agency framework the politics of how data collection and verification differ between the EDP and MIP, with implications for the integrative processes of Europeanization and institutionalization.  In particular, this paper explores how the statistical requirements of Six Pack have been enforced by the Commission and ECOFIN to strengthen the EDP and require member state compliance, while, at the same time, the statistical integrity of the MIP has received less protection.