Political and instrumental leadership in major EU reforms. The role and influence of the EU institutions in setting-up the Fiscal Compact

Abstract

ABSTRACT This paper analyses the role and influence of the EU institutions in major reform negotiations. We argue that one of the paradoxes of European Council dominated decision-making has been the enhanced dependence on EU institutions to translate broad priorities into actual reforms. We substantiate this claim by means of an in-depth process-tracing analysis of the Fiscal Compact. The conventional wisdom is that the Fiscal Compact was a German dictate. Instead, we show that it resulted from a division of labour: political leadership by member states in the control room, and instrumental leadership by the institutions in the machine room. Such instrumental leadership is unjustly depicted as mere facilitation, with little impact on process and outcome. We juxtapose the Fiscal Compact to two similar cases of Germany-led EU reforms (the Euro-Plus-Pact and Contractual Arrangements) to reveal the leadership activities by the institutions and the fingerprints these left in the final outcome.