Abstract
The banking union constitutes not only a major advance in supranational economic integration but also increases differentiated integration among the member states of the European Union. Although the banking union is open to all EU member states, only euro area countries participate. Other member states have been opponents, bystanders, or interested non-participants. This article explains the variation in participation as a result of path-dependency arising from the original differentiation between euro area countries and the rest of the EU. In the euro crisis, these two groups of member states were subject to differential pressure to integrate further. In addition, the banking union reinforced the causes that had led to the original differentiation of the monetary union. This path-dependency overrides variation in sector-specific economic interests, governance capacity, and policy paradigms that might otherwise explain governmental preferences in banking regulation. These factors can, however, partly explain variation in preferences among the non-euro area countries.
Acknowledgements
I wish to thank the special issue editors, Ismail Emre Bayram, and two anonymous reviewers for West European Politics for helpful comments on earlier versions of the paper.
Notes
1. For a discussion of definitions and types of differentiated integration, see Holzinger and Schimmelfennig (Citation2012) and CitationLeuffen et al. (2013).
2. Regulation of the European Parliament and the Council (EU) 806/2014, recital 17.
3. Regulation of the Council (EU) 1024/2013, recitals 42 and 43, Art. 7.
4. Regulation of the Council (EU) 1024/2013, recital 14.
5. Decision of the European Central Bank 2014/5.
6. Schimmelfennig et al. (Citation2015) make a general argument on how the asymmetric politicisation of issues in EU member states triggers differentiated integration.