This contribution analyses the relevance of neofunctionalist theory and the various spillover mechanisms for explaining the management of the crisis and the drive towards a more complete Economic and ...Monetary Union (EMU). The management of the crisis resulted in integrative outcomes owing to significant functional dissonances that arose from the incomplete EMU architecture created at Maastricht. These functional rationales were reinforced by integrative pressures exercised by supranational institutions, transnational organized interests and markets. The contribution concludes that, despite shortcomings, neofunctionalism provides important insights for understanding the integrative steps taken during the crisis.
After a decade of reforming and stabilising the Economic and Monetary Union (EMU), it has been put to a triple test: the COVID-19 pandemic, the war in Ukraine, and the return of inflation have posed ...serious challenges to the eurozone that call for policy responses. Against the background of recent advances in European integration theory, we assess whether and how these challenges have led to a change in the EMU policy of the eurozone's most powerful member, Germany. We conceptualise three ideal-typical policy options for Germany to deal with EMU's challenges and we search for traces of policy learning from past eurozone crisis management. On the basis of semi-structured interviews with German political elites, we cannot identify any significant change in Germany's EMU policy. We conclude that the unwavering continuity of Germany's euro policy makes further substantial integration in EMU unlikely.
In this article, we apply the 'failing forward' approach to analyse the negotiations on and design of reforms to Eurozone economic governance to tackle the Covid-19-related crisis of Economic and ...Monetary Union (EMU). This crisis highlights both spill-overs from major asymmetries in EMU and weaknesses in the incomplete economic governance of the Eurozone. We focus on the financial support mechanisms agreed upon after intergovernmental negotiations in major crisis situations. These reforms represent compromise solutions that reflect well-entrenched disagreements among member states. We explain why more far-reaching reforms to Eurozone economic governance - notably, the adoption of mutualized Euro-denominated debt and the generalized use of grants over loans - have not been adopted, despite the severity of the Covid-19-related crisis. These reforms - notably the Next Generation European Union (NGEU) financial package adopted in July 2020 - fail to address and, rather, contribute to existing asymmetries, thus sowing the seeds of future crises.
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.
European fiscal integration is highly controversial and is assumed to lead to a Eurosceptic backlash among the public. Yet, in a historical decision in July 2020, European governments agreed on the ...ambitious recovery package 'Next Generation EU', establishing an unprecedented fiscal stabilisation capacity to address the economic and healthcare challenges of the COVID-19 pandemic. We study the mass politics of European fiscal integration in a survey experiment on public support for a European Pandemic Recovery Fund (PRF) in five European countries in 2020. We find remarkably high support for a joint European fiscal instrument, which, however, is sensitive to policy design. While cross-country differences reflect collective self-interest, citizens' left-right orientations, their EU positions, and perceived economic risk from COVID-19 structure differences within countries.
The European Union's (EU's) responses to the economic and financial crisis provided a vigorous illustration for how the role of the Union's core intergovernmental bodies - the European Council and ...the Council - has evolved in recent years. The European Council has emerged as the centre of political gravity in the field of economic governance. The Council and the Eurogroup fulfil a crucial role as forums for policy debate. The emphasis on increased high-level intergovernmental policy co-ordination is the reflection of an integration paradox inherent to the post-Maastricht EU. While policy interdependencies have grown, member state governments have resisted the further transfer of formal competences to the EU level and did not follow the model of the Community method. Instead, they aim for greater policy coherence through intensified intergovernmental co-ordination. Given its consensus dependency, this co-ordination system can best be conceptualized as deliberative intergovernmentalism.
The collection of articles in this special issue provides a comprehensive analysis of European Union decision-making during the Eurozone crisis. We investigate national preference formation and ...interstate bargaining related to major reforms of the Economic and Monetary Union. The analyses rely on the new ‘EMU Positions’ dataset. This dataset includes information about the preferences and saliences of all 28 EU member states and key EU institutions, regarding 47 contested issues negotiated between 2010 and 2015. In this introductory article, we first articulate the motivation behind this special issue and outline its collective contribution. We then briefly summarise each article within this collection; the articles analyse agenda setting, preference formation, coalition building, bargaining dynamics, and bargaining success. Finally, we present and discuss the ‘EMU Positions’ dataset.
Abstract During the Eurozone's sovereign debt crisis, the ideational consensus that shaped the foundation of Economic and Monetary Union (EMU) was destabilized by disagreement on unconventional ...monetary policies (UMPs), specifically government bond purchases. In the ECB's 2021 strategy review, however, UMPs were confirmed as standard elements of the European Central Bank's (ECB) toolbox. What happened? One argument frequently presented to question the legitimacy of UMPs is that they undermine the prior objective of the EMU of avoiding moral hazard. We analyse the politics of UMPs by focusing upon how top officials in four major Eurozone central banks have discursively constructed the relationship between the ECB's purchase of sovereign debt and moral hazard. We find that top central bank officials aligned to a large degree on the non‐necessary causal relationship between government bond purchases and moral hazard, which reinforced its legitimacy and eventual acceptance as ‘conventional’.
Abstract
The European Union's (EU's) response to the pandemic has been accompanied by reconfigurations in its institutional hierarchy, affecting the sites where institutional reforms are prepared and ...implemented. Whereas the Eurogroup drove reform during the euro crisis, the Commission had a more pronounced role in the development and implementation of pandemic instruments. This article ties in with failing‐forward arguments that view European integration as cyclical, arguing that this cyclicality also concerns the institutional dynamics in European economic governance. Based on expert interviews, official documents and reports, the analysis reconstructs and compares the institutional configurations during the euro crisis and the pandemic. Its findings suggest three modifications to ‘failing forward’: first, incomplete intergovernmental decisions are often the result of dominant particular interests rather than ‘lowest common denominator’ solutions; second, supranational bodies can exploit the delegitimization of intergovernmental solutions; and third, ad hoc measures can prolong the failing‐forward cycle and displace lasting integration steps.
Using a unique dataset of the Euro-area and the U.S. bank lending standards, we find that low (monetary policy) short-term interest rates soften standards for household and corporate loans. This ...softening—especially for mortgages—is amplified by securitization activity, weak supervision for bank capital, and low monetary policy rates for an extended period. Conversely, low long-term interest rates do not soften lending standards. Finally, countries with softer lending standards before the crisis related to negative Taylor rule residuals experienced a worse economic performance afterward. These results help shed light on the origins of the crisis and have important policy implications.
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