Taskforce agrees economic governance reforms | European Voice

Sequence is a highly underrated element of politics. The tentative agreement to bolster economic governance in the EU demonstrates this in spades:

There is an agreement that, in a system where fiscal responsibility remains largely under the
responsibility of national authorities, there is a need for a credible enforcement mechanism at the
EU level,” Van Rompuy said after the meeting.

He said that sanctions against member states with high deficit or debt levels “would be introduced at an earlier stage, be more progressive and rely on a wider spectrum of enforcement measures” than under the EU's existing rules for fiscal responsibility, which essentially failed in the run-up to the debt crisis.

Van Rompuy said that governments had agreed that available sanctions should include suspension of EU funds, and that the necessary steps to make this sanction available should be taken “as soon as possible”. He did not clarify, however, which funds would be included in this. The step nevertheless marks a defeat for Spain, Austria, Portugal, Greece and Slovenia, which had argued vehemently against suspending funding, on the grounds that it would further damage a country's weak country's economic performance.

Cutting off EU funding in the middle of an economic crisis is a horrible idea, but if the threat to do so is credible enough states might actually follow the rules. By following the rules, states will be better off economically and there will be no need to cut off funding. For the states bailing out their neighbors, this sequence looks good. For the states being bailed out, this sequence looks bad.