EU Economic Governance as a Supranational Determinant of Health Inequalities in the Eurozone.

Abstract

The pandemic raises the question of the problematic social toll of austerity for health in the South of Europe. Has EU economic governance constrained health spending fuelling inequalities, in turn, shaping responses to the pandemic? EU economic governance is often dismissed as ineffective due to its poor track record of compliance. Yet, austerity is blamed for negative health outcomes. I show the EU fiscal rule is a determinant of health by impacting of fiscal policies of European countries. Firstly, the analysis of EU Member States 1995-2018 shows austerity policies impact health spending and health inequalities. Euro area countries under the EU Excessive Deficit Procedure significantly consolidate their health spending. The contractionary effect is concentrated in Southern countries, contributing to rising health inequalities across the core and periphery. Finally, the analysis shows the pandemic implications of health inequalities as periphery countries with a high track record of consolidation display more stringent (and costly) Covid-19 response models. The analysis contributes to understanding the supranational determinants of health in the EU, showing the pervasive spill over effects of the fiscal framework on national health policies.