A particular rationalization of money and risk: The asymmetric application of the Stability and Growth Pact

Unsound budgetary policies threaten to increase inflationary pressures through fiscal expansion. Such orthodoxy, otherwise labeled as “new monetarism”, underpins the European Monetary Union (EMU) and reproduces a neoliberal regulatory response in the form of the Stability and Growth Pact (SGP). Lacking is a supranational institution for the conduct of fiscal policies. Rather, EMU privileges rules over discretion while relying on “mutual surveillance ” procedures aimed at encouraging the naming and shaming of offenders into compliance. Recent events, however, attest to their failure and the supposed ideological subversion of monetarism by its very architects, namely Germany and France. Whereas the SGP was devised as the anchor for the euro it has come symbolize its weakness. What is witnessed is an antagonistic relationship between the programmatic and operational dimensions of monetary governance. The administrative process of regulating EMU conflicts with the individual budgetary conduct of member states. Together with the ideological and conceptual inconsistencies apparent in governing the EMU is an institutional one as the asymmetric application of the SGP b