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Abstract
The European crisis is the best case study for examining both the vulnerabilities of Europe's framework for economic governance and the very process of European integration itself. This statement is true for several reasons: first, because the European crisis is the most serious crisis the European Union has faced to date; second, because of the crisis, limits on the process of economic integration in Europe have been put to a real test; and third, because the main causes of the crisis are tied into the framework for economic governance that has been developed over the last few decades and therefore are connected to the very process of European unification itself. The primary aim of this paper is to demonstrate whether and to what extent the new framework for economic governance in Europe is largely a result of interstate bargaining and consequently whether national preferences continue to play an important role in the framework's general transformation. The economic crisis showed that important issues in economic policy concerning the change in economic governance and the role of the nation-state, which were ‘swept under the carpet’ in recent decades, must be resolved to make the European venture viable.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes
1 Email: [email protected]
2 For other excellent contributions, see Fabbrini (Citation2013), Chang (Citation2013), Bickerton, Hodson, and Puetter (Citation2015), Clift and Ryner (Citation2014), Crespy and Schmidt (Citation2014), Schimmelfennig (Citation2014) and Schimmelfennig (Citation2015).
3 ‘Economists’ believed that before the creation of the EMU, the economic and financial conditions for its long-run viability should already exist. Thus, economic convergence is a precondition for monetary integration. This view was adopted by Germany and the Netherlands. ‘Monetarists’ believed that the process of monetary integration could create the necessary economic conditions for the EMU's long-run viability. This view was largely adopted by France, Belgium and Luxembourg. See Tsoukalis (Citation1977) and Kruse (Citation1980). Those who designed the EMU were not clear about which approach to follow in establishing it. See Verdun (Citation2007b). In other words, the key players were not in agreement about whether and to what extent the convergence of economies ought to come before the transfer of sovereignty over monetary policy to a supranational level. See Verdun (Citation2007a).
4 Germany's negotiating position in the discussions about the Treaty of Maastricht was influenced by the economic philosophy of ordo-liberalism—see Dyson and Featherstone (Citation1999)—which is tied into a political approach based on the rules of Ordnungspolitik in which the state only lays down the legal framework within which private players can act as freely as possible. See Mussler (Citation2011). For a general overview of the main reasons for conflict between France and Germany up to the signing of the Treaty of Maastricht, see Maes (Citation2004).
5 For excellent contributions on the German model of economic growth during the Eurozone crisis, see Bonatti and Fracasso (Citation2013) and Jessop (Citation2014).
6 For alternative views see Kotios and Roukanas (Citation2013), and Sklias and Maris (Citation2013).
7 See Olli Rehn Speech in European Policy Centre Brussels, 15 April 2010, 3.
8 See Statement of the Heads of State or Government of the Euro Area, 7 May 2010, 2.
9 Decided on 9 May 2010 at the Extraordinary Council Meeting.
10 Adopted at the European Council, 7 September 2010.
11 The proposals for the Six-Pack were presented by the European Commission in September 2010. The Six-Pack was adopted by the European Parliament on 28 September 2011.
12 Adopted by the European Council on 24/25 March 2011.
13 Decided on 28 November 2010.
14 The two regulations were adopted at the European Council on 21 February 2012.
15 For the ECB's early response to the crisis, see Trichet (Citation2010).
16 See the ECB's press release on 10 May 2010.
17 See Mario Draghi's speech at the Global Investment Conference in London, 26 July 2012.
18 See Mario Draghi's introductory statement to a press conference, 2 August 2012.
19 See the ECB's press release at Technical Features of Outright Monetary Transactions, 6 September 2012.
20 See the European Commission proposal for the new ECB powers for banking supervision as part of a banking union IP/12/953, 12 September 2012.
21 For the ECB's role as a Lender of Last Resort, see Buiter and Rahbari (Citation2012).
22 See Jens Weidmann's speech at the Association of Family Enterprises in Cologne on 13 September 2011.
23 In contrast, scholars have argued that ‘the Commission's importance in the European Economic integration process has not diminished, but its role has shifted’ (Bauer and Becker Citation2014, 227). For Bauer and Becker (Citation2014), it is very difficult to distinguish the intergovernmental and supranational models of economic governance in Europe because the EU is characterised by different modes of governance in all relevant policy areas. For Andrews (Citation2013), the Commission's commitment in relation to the nature and direction of European integrations has remained constant.
24 For excellent contributions, see Young and Semmler (Citation2012), Bulmer (Citation2014), Siems and Schnyder (Citation2014), Van Esch (Citation2014) and Young (Citation2014).