Making states for the single market: European integration and the reshaping of economic states in the Southern and Eastern peripheries of Europe

Abstract

European integration has profoundly reshaped states in Europe’s peripheries. It has deprived them of the traditional means of autonomously managing development, imposed institutions defending the integrity of the regional market from domestic actors, and provided them, in exchange, with EU-level development policies. However, whereas in the South the EU has relied primarily on incentives for remaking the economic state, in the East it has engaged in direct institution-building. The different EU strategies pushed the evolution of the economic state in the two peripheries in different directions and the two parts of Europe now face different developmental dilemmas. Despite their differences, neither the Eastern nor the Southern states have the capacity to get in synch the triple challenge of integration: playing by the uniform regional rules, improving their positions in the European markets and extending the range of domestic beneficiaries of integration. While the ensuing economic and political tensions might endanger regional integration, EU-level capacities for addressing the developmental problems of the peripheries are in short supply.

Keywords:

• Development
• economic integration
• EU
• periphery
• state

Acknowledgements

For critical comments and suggestions we are grateful to Dorothee Bohle, Sabino Cassese, Adrian Favell, Anna Grzymala-Busse, Adrienne Héritier, Wade Jacoby, Vytautas Kuokštis, Gergő Medve-Bálint, Jan Hinrik Meyer Sahling, Vera Scepanovic, David Stark and Milada Vachudova, and two anonymous reviewers.

Notes

1. In this article we refer by Eastern periphery to the 10 EU member states from Central and Eastern Europe and by Southern periphery we refer to Greece, Portugal and Spain, also known as the cohesion countries. The group of cohesion countries originally also included Ireland, and although the latter has in the late 1990s shifted from being the ‘Mezzogiorno of Europe’ to the ‘Celtic Tiger’, in the 2008 crisis it was again classified as part of the Portugal, Ireland, Greece and Spain (PIGS), displaying similar vulnerabilities as the peripheral Southern economies of Europe. However, since Ireland is a bit of a maverick in this group, with a rather different and much more transnationalised developmental pathway, in this article we use the Southern periphery primarily as a shorthand for Spain, Portugal and Greece.