Tiziano Zgaga's The Fiscal Governance of the European Union: Overcoming the Stability Paradigm? (2025) provides a timely account of the evolution of EU fiscal governance from Maastricht to the post-pandemic era, covering both the 2024 reform of the Stability and Growth Pact (SGP) and the security-driven spending spree in 2025. The study's core question is whether EU fiscal governance remains anchored in a stability paradigm or whether successive crises have produced a meaningful change in its core goals. The book frames EU fiscal governance as a policy paradigm in Hall’s (1993) sense, defined by goals, instruments, and settings that structure policy outcomes and political conflict. Zgaga argues that while the stability paradigm has proven resilient, it has absorbed partially competing fiscal ideas, that is, different assumptions about how discipline should be pursued and justified. This approach refrains to see the SGP's evolution in Manichean terms: the Pact neither remained trapped in a rigid austerity model nor it espoused unmitigated flexibility and/or differentiation with NextGenerationEU, that is, the stimulus package promoted by the EU as a response to the Covid-19 pandemic. The explanatory framework draws eclectically on EU integration theories. Liberal intergovernmentalism and domestic politics account for bargaining outcomes and veto points in major reforms, while neofunctionalist dynamics illuminate spillovers and the incremental expansion of supranational oversight. These perspectives are integrated within a historical-institutionalist understanding of crises as catalysts for change. Within this account, Franco-German bargaining shapes both the direction and limits of reform, while other coalitions, such as the fiscally conservative Frugal Four and the opposed Solidarity Coalition, comprising Italy and Spain, affect negotiations and implementation. Methodologically, the book employs the thematic analysis of legal and policy texts. Zgaga codes elements of fiscal governance to trace how key themes such as flexibility and differentiation evolve across successive regulatory phases. The 2024 reform is analyzed in greater detail through explaining-outcome process tracing, which reconstructs the causal mechanisms linking Commission proposals, member-state negotiations, and the final institutional design. Substantively, the study traces the different phases of EU fiscal governance evolution: the creation of the Economic and Monetary Union's (EMU) fiscal framework in the early 1990s, the consolidation of the SGP, its early enforcement failures, the strengthening of fiscal surveillance during the euro crisis via the Six-Pack, Two-Pack and Fiscal Compact, the legitimacy challenges of the 2010s, the pandemic-era suspension of fiscal rules through the general escape clause and, finally, the 2023–24 negotiations culminating in a new governance architecture centered on national medium-term fiscal-structural plans (MTPs). One of the most valuable parts of the book is its detailed account of the 2024 reform, interpreted as recalibration rather than abandonment of the stability paradigm. Fiscal discipline and debt sustainability remain central, but governance is redesigned to permit greater national differentiation and to increase the role of bottom-up policy input, thus internalizing the lessons learned with NextGenerationEU. At the same time, the reform seeks to address chronic enforcement failures by tightening links between expenditure paths, debt trajectories, and country-specific recommendations. Extending the discussion into 2025, Zgaga highlights how defense spending pressures may challenge excessively dogmatic fascinations with fiscal stability. Overall, Zgaga's book is methodologically and empirically very sound, and provides a timely and precise overview of the SGP's development over time. Yet, a number of shortcomings have to be underscored. The theory engages insufficiently with the economic foundations of monetary unions: key macroeconomic constraints, such as the old and new impossible trinities (De Grauwe 2022; Pisani-Ferry 2014), are mentioned only in passim, leaving European fiscal governance framed as a legal-institutional and ideational construct instead of understanding it as a functional component of the EMU. This framing obscures rather than clarifies the assessment of why the SGP is necessary and why it persists, in at least three interlocking respects. First, the exclusive focus on fiscal discipline overlooks that some specific micro-policy areas, especially related to the labor market, for example, primus inter pares, wage-setting dynamics, are central to adjustment and competitiveness in the EMU (see Guidi and Guardiancich 2025). Second, related, the book does not fully capture the broader imbalances that fed into the sovereign debt crisis, which were not reducible to public indebtedness but also involved private credit booms, current-account divergence, and structural competitiveness gaps within a monetary union lacking sufficient risk-sharing. Finally, while the author correctly observes that treaty-based stability goals were non-negotiable throughout the SGP's reform history, the analytical implication is not fully drawn. If fiscal stability is a constitutive condition of the EMU, then its non-negotiability is not merely an empirical observation but follows from the institutional architecture of the euro, thus making the point, in a Wittgensteinian sense, close to tautological. Data sharing not applicable to this article as no datasets were generated or analyzed during the current study.
Igor Guardiancich (Wed,) studied this question.