How did the euro area survive the crisis?

Abstract

Six recent books differ in their explanations as to how the euro area survived the crisis. In this review it is concluded that strong supranational institutions rather than German or Franco-German leadership, shared identity or the popular legitimacy of central institutions have been the crucial condition. Popular support for the euro has remained relatively high in many member states. While the crisis led to some expansion of the intergovernmental method, survival of the euro area required a great expansion in the powers of supranational institutions.

Keywords:

• Euro area
• sustainability
• hegemony
• intergovernmental governance
• supranationalism
• legitimacy
• democracy

Acknowledgements

I am grateful to Benjamin Cohen, David Howarth, Erik Jones, Anand Menon, Manuela Moschella, André Sapir, Christina Schneider, Gerald Schneider, Alfred Tovias, Stefanie Walter, Charles Wyplosz and participants in a research workshop at the University of Zurich in May 2016, in the meeting of the Israeli Association for the Study of European Integration in October 2016, and EUSA meeting in Miami in May 2017 for their comments on earlier drafts of this paper. Parts of this paper are based on research conducted while I was visiting the Graduate Institute Geneva and the University of Konstanz.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1 There is no scope here to do justice to all of the vast literature on the euro area. Other recent reviews have highlighted the errors of policy makers (De Grauwe 2013), provided comparative political analysis based on the varieties of capitalism literature (Iversen et al. 2016) surveyed the causes of the crisis, and emphasised domestic and international distributive conflicts (Frieden and Walter 2017).

2 The review refers to the authors of the different contributions within these edited volumes.

3 Wallace (2015: 106) is more sceptical of the centralising effects of the Fiscal Compact, pointing out that only four member states have incorporated debt brakes into their national constitutions (Wyplosz 2016).

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Notes on contributors

Tal Sadeh

Tal Sadeh is Senior Lecturer in the School of Political Science, Governance and International Relations, Tel Aviv University, and head of the European Union studies programme there. He is the author of Sustaining European Monetary Union (2006) and co-editor of The Political Economy of Europe’s Incomplete Single Market (2011), and has published articles and edited special issues in leading academic journals, such as European Union Politics, Journal of Conflict Resolution, Journal of European Public Policy and Review of International Political Economy. His most recent publications have focused on the political economy of the euro area, and the trade effects of interstate conflicts. In addition to these topics, current projects also include the politics of sovereign debt management and the role of securitisation in multilateral diplomacy. [[email protected]]