The hard side of soft policy co-ordination in EMU: the impact of peer pressure on publicized opinion in the cases of Germany and Ireland

Abstract:

The European Union's Stability and Growth Pact (SGP) and the Broad Economic Policy Guidelines (BEPG) rely heavily on 'soft' means of applying pressure on Member State governments both behind closed doors and also through publicized recommendations and reprimands. But do these sanctions bite and if so, how? Do they lead to learning, blame-shifting or technocratic public discourse? These questions are not only relevant in the context of assessing the effectiveness of economic policy co-ordination, but they also help us to better understand new modes of governance. The article investigates how peer review impacts on publicized domestic discourse by drawing on the results of a media content analysis in the case of a critical recommendation addressed to Ireland in January 2001 (BEPG) and an early warning (SGP) proposed in the case of Germany one year later. Both case studies confirm that proposals for recommendations were given considerable media attention and forced governments to justify themselves. However, while the German government failed to deflect press criticism, the Irish administration could increasingly rely on media support for its defence of budgetary sovereignty. The article considers some explanations of why these debates developed differently. It concludes by arguing that naming and shaming in its present form has not fully realized its potential to induce learning and policy change.

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