Regulatory state building in fiscal surveillance: the U.S. and the EU contrasted

Preliminary draft – comments welcome! Abstract: This contribution analyzes, first, how the EU regulatory state has expanded into fiscal surveillance and how this contrasts with the U.S., a contrast that is more subtle than is often acknowledged. The paper shows that the EU has a more developed ‘fourth branch of government ’ in budgetary policies than the U.S. where the notion of the regulatory state was first developed. The paper then looks into whether and, if so, how this can explain the different responses to the ongoing economic and financial crisis in Europe and in the United States. I conclude that member states in the EU allow more intrusive regulation of budgets because the EU is not a full-fledged competing government level. In the United States, by contrast, the balance of power in the federation would be completely upset by a federal government with its enormous budget if it were given strong rights of regulatory oversight as well. The conclusions address the critique that the EU regulatory state poses a threat to political sovereignty and social protection in member states