The Eurozone crisis constitutes a grave challenge to European integration. This article presents an overview of the causes of the crisis and analyzes why it has been so difficult to resolve. We focus ...on how responses to the crisis were shaped by distributive conflicts both among and within countries. On the international level, debtor and creditor countries have fought over the distribution of responsibility for the accumulated debt; countries with current account surpluses and deficits have fought over who should implement the policies necessary to reduce the current account imbalances. Within countries, interest groups have fought to shift the costs of crisis resolution away from themselves. The article emphasizes that the Eurozone crisis shares many features of previous debt and balance-of-payments crises. However, the Eurozone's predicament is unique because it is set within a monetary union that strongly constrains the policy options available to policy makers and vastly increases the interdependence of the euro crisis countries. The outcome of the crisis has also been highly unusual because the costs of crisis resolution have been borne almost exclusively by the debtor countries and taxpayers in the Eurozone.
Dirk Meyer und Arne Hansen, Helmut-Schmidt-Universität, Universität der Bundeswehr Hamburg, sehen den Fortbestand der Währungsunion durch vorhandene Instabilitäten gefährdet. Damit die ...Euro-Währungsunion nicht endet, sei eine Neuordnung im Rahmen eines Verfassungskonvents unumgänglich. Hierfür wären eine glaubwürdige Re-Institutionalisierung des Bailout-Verbots und des Verbots der monetären Staatsfinanzierung, eine Besicherung der TARGET2-Kredite, Regeln eines geordneten Euro-Austritts und Parallelwährungen die Stichworte.
Bodo Herzog, ESB Business School, Reutlingen, sieht die europäische Fiskalarchitektur seit dem Vertrag von Maastricht in ein regelgebundenes und marktbasiertes Regelwerk eingebunden. Diesen Regeln ...mangele es aber an Bindekraft, vor allem aufgrund des Vollzugsdefizits der Europäischen Kommission. Deshalb bedürfe es automatischen Vollzugsmechanismen und Marktkräften. Er schlägt zur Reform der europäischen Fiskalarchitektur eine zweistufige Übergangsphase vor. Ähnlich der Konvergenzphase zur Währungsunion in den 1990er Jahren könnten zwei Fiskaloptionen mit Zugangskriterien definiert werden: ein Weg in die Politische (Fiskal-)Union und ein Weg in die regelbasierte Maastricht-Union mit automatischem Regelvollzug und Marktkräften.
The Political Economy of the Euro Crisis Copelovitch, Mark; Frieden, Jeffry; Walter, Stefanie
Comparative political studies,
06/2016, Volume:
49, Issue:
7
Journal Article
Peer reviewed
Open access
This article introduces the special issue on the political economy of the Euro crisis, which aims to improve our understanding of the causes, consequences, and implications of the highly unusual ...nature of this crisis: a financial crisis among developed countries within a supranational monetary union. The article provides a brief chronology of the crisis, discusses its underlying causes, and reviews the ways in which comparative and international political economy can help us understand the crisis. The article then discusses the individual and collective contributions of the articles in the special issue and discusses possible future research paths on the political economy of the Euro crisis. We conclude with a brief discussion of how a political economy perspective informs our understanding of the long-term prospects for the Eurozone and European integration.
This article focuses on the dynamics and interplay of meaning, emotions, and power in institutional work. Based on an empirical study, we explore and elaborate on the rhetorical strategies of emotion ...work that institutional actors employ to mobilize emotions for discursive institutional work. In an empirical context where a powerful institutional actor is tasked with creating support and acceptance for a new political and economic institution, we identify three rhetorical strategies of emotion work: eclipsing, diverting and evoking emotions. These strategies are employed to arouse, regulate, and organize emotions that underpin legitimacy judgments and drive resistance among field constituents. We find that actors exercise influence and engage in overt forms of emotion work by evoking shame and pride to sanction and reward particular expedient ways of thinking and feeling about the new institutional arrangements. More importantly, however, the study shows that they also engage in strategies of discursive institutional work that seek to exert power—force and influence—in more subtle ways by eclipsing and diverting the collective fears, anxieties, and moral indignation that drive resistance and breed negative legitimacy evaluations. Overall, the study suggests that emotions play an important role in institutional work associated with creating institutions, not only via “pathos appeals” but also as tools of discursive, cultural-cognitive meaning work and in the exercise of power in the field.
The study of policy reform has tended to focus on single‐stage reforms taking place over a relatively short period. Recent research has drawn attention to gradual policy changes unfolding over ...extended periods. One strategy of gradual change is layering, in which new policy dimensions are introduced by adding new policy instruments or by redesigning existing ones to address new concerns. The limited research on single‐stage policy reforms highlights that these may not endure in the postenactment phase when circumstances change. We argue that gradual policy layering may create sustainability dynamics that can result in lasting reform trajectories. The European Union's Common Agricultural Policy (CAP) has changed substantially over the last three decades in response to emerging policy concerns by adding new layers. This succession of reforms proved durable and resilient to reversal in the lead‐up to the 2013 CAP reform when institutional and political circumstances changed.
We analyze data from an author-conducted survey of members of the French and German parliaments on European Monetary Union reform preferences. We consider three potential drivers of preferences: ...nationality, ideology, and personal characteristics. For European Monetary Union policies like Eurobonds, the Fiscal Compact, and the European Central Bank asset purchase program we find a robust difference between parliamentarians of both countries if they belong to the same party family and controlling for individual characteristics. Based on our estimates, however, we predict agreement between German left-wingers and French conservatives even for ideological differences that are smaller than the current difference between the left and the right European party families. Our findings suggest that deeply-rooted national differences do not impose a prohibitive obstacle to a German-French parliamentary consensus on European Monetary Union policies.
Risk sharing and the adoption of the Euro Ferrari, Alessandro; Rogantini Picco, Anna
Journal of international economics,
March 2023, 2023-03-00, Volume:
141
Journal Article
Peer reviewed
Open access
This paper empirically evaluates whether adopting a common currency has changed the level of consumption smoothing of euro area member states. We construct a counterfactual dataset of macroeconomic ...variables through the synthetic control method. We then use the output variance decomposition of Asdrubali et al. (1996) on both the actual and the synthetic data to study if there has been a change in risk sharing and through which channels. We find that the euro adoption has reduced risk sharing and consumption smoothing. We further show that this reduction is mainly driven by the periphery countries of the euro area who have experienced a decrease in risk sharing through private credit.
•We estimate the effect of the Euro on risk-sharing via Synthetic Control Method.•Adoption of the Euro has reduced risk sharing and consumption smoothing.•Effects are heterogeneous with periphery countries experiencing the biggest reduction.•This effect is driven by lower risk sharing through the private credit channel.
In our European Economic Review (2002) paper, we used pre-1998 data on countries participating in and leaving currency unions to estimate the effect of currency unions on trade using (then-) ...conventional gravity models. In this paper, we use a variety of empirical gravity models to estimate the currency union effect on trade and exports, using recent data which includes the European Economic and Monetary Union (EMU). We have three findings. First, our assumption of symmetry between the effects of entering and leaving a currency union seems reasonable in the data. Second, our preferred methodology indicates that EMU has boosted exports by around 50%. While other estimation techniques yield different results, a panel approach with both time-varying country and dyadic fixed effects on a large span of data (across both countries and time) seems to deliver insensitive and reliable results. Third, different currency unions have different trade effects.
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