Europe's Macro-Economic Frame-Slip: Diagnosis, Legal Implications, and Post-Growth Stabilisation

European macro-economic governance appears coherent at the aggregate level, yet persistently fails to stabilise lived economic outcomes across member states. European macro-economic governance exhibits a persistent pattern of underperformance, divergence, and political instability despite repeated cycles of reform and crisis intervention. These outcomes are commonly attributed to policy error, insufficient compliance, or incomplete integration. This paper advances a different diagnosis. It argues that many of the European Union’s macro-economic contradictions arise from a structural misalignment between the frame in which EU-level policy is formulated and the heterogeneous frames in which economic life is experienced across member states. By examining ten long-standing inconsistencies in EU macro-economic architecture—including fiscal rules versus investment imperatives, monetary union without fiscal stabilisation, persistent internal imbalances, demographic decline, incomplete banking union, and continued dependence on growth-based sustainability models—the paper shows that these issues are not independent failures but multiple manifestations of a single design flaw. Uniform governance applied to weakly coupled, heterogeneous economies produces directional divergence rather than convergence, while aggregate indicators mask underlying stress. Using a systems-diagnostic approach informed by recent work on late-time anisotropy and frame-dependent reconstruction, the paper introduces the concept of frame slip to explain why macro-economic policy appears coherent at the institutional level yet fails to stabilise lived economic outcomes. Empirical illustrations from the United Kingdom, the EU27 aggregate, and Italy demonstrate that GDP growth has ceased to function as a reliable coupling variable between output, employment, welfare, and fiscal sustainability. The paper then proposes a shift from growth-based to coherence-based macro-economic governance. It argues that fiscal sustainability under post-growth conditions requires alternative stabilising anchors grounded in participation, service provision, and institutional continuity. In this context, the Engagement Credit Economy is presented as a participation-based framework capable of substituting for growth as the organising principle of fiscal legitimacy without coercive labour activation. The paper concludes by outlining a staged, institutionally feasible implementation pathway within and beyond existing EU treaties. This paper builds on the Engagement Credit Economy (ECE) research programme, based on the foundational ECE master record (https://zenodo.org/records/18134114) This research is produced independently under the Drive-In s.r.o. research programme.Readers who wish to support its continuation may do so here: https://ko-fi.com/johnryder99892