Influence of the European Semester on national public sector reforms under conditions of fiscal consolidation: The policy of conditionality in Italy 2011–2015

This article applies the Schimmelfennig and Sedelmeier “governance by conditionality” framework to public sector reform in a European Union (EU) country subject to implicit rather than explicit conditionality in the context of severe fiscal consolidation. It analyses the reform programmes of the governments that alternated in power in Italy over 2011–2015, focusing on three major areas of public sector reform – fiscal consolidation, labour market reform and liberalization – in the context of the Country-Specific Recommendations–National Reform Plan (CSR-NRP) cycle. We show that the EU has influenced governance (budget institutions and the governance structure of the NRP process) as well as the content of reforms. These results are consistent with the Schimmelfennig and Sedelmeier framework regarding the importance of external incentives in explaining adoption and implementation of reforms. Our findings confirm not only the importance of material conditions and their credibility in explaining the fit between EU recommendations and domestic reforms, but also the significance of the strategic usage of Europe by domestic policy makers, which has become more important as the legitimacy of the EU has decreased among voters. We conclude with some reflections on the implications of our research for the ongoing debate on the reform of the European Semester, in particular with regard to the question of how to ensure a higher fit between EU recommendation and domestic policies.