EMU and political union revisited: what we learnt from the euro’s second decade

ABSTRACT

In spite of expectations to the contrary, Economic and Monetary Union (EMU) did not serve as a leaven for political union during the euro’s second decade. Reforms to Euro Area governance enacted in this period, though significant, stopped well short of the degree of economic and political integration associated with this project. EU policy-makers nonetheless showed a new willingness to talk about political union, albeit in ways that stretched the meaning of this previously taboo term. Such talk, which was driven by financial market pressure and political positioning between member states at the height of the Euro Crisis, had limited bearing on Euro Area governance. But it may have been a factor in the United Kingdom’s referendum vote to leave the EU. A lesson for EU policy-makers is that they should use the term political union more sparingly if at all.

KEYWORDS:

• Economic and Monetary Union
• political Union
• Euro Area reform
• Euro Area governance
• EU institutions
• UK referendum

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. An earlier version of this paper was presented at the EMU at Twenty workshop at Leiden University (16–17 November 2018) https://www.uvic.ca/interdisciplinary/europe/eu-grants/network/eurosem-18-21/the-emu-at-twenty/index.php. This workshop was supported by the Institute of Political Science at Leiden University and launched the Jean Monnet Network entitled ‘The Politics of the European Semester: EU Coordination and Domestic Political Institutions (EUROSEM)’ Agreement number: 600,110-EPP-1-2018-1-CA-EPPJMO-NETWORK (Grant agreement nr 2018–1359), cofounded by the Erasmus+ programme of the European Union. Thanks to Amy Verdun, David Howarth, James Savage, other workshop participants and two anonymous referees for helpful comments. Any errors that remain are mine alone.

2. The distinction between intentionalism and functionalism is taken from Wolf (2002).

3. Börzel (2005) offers a more recent and sophisticated treatment of these concepts although they do not map quite so well onto these conceptions of political union. Similar to Schmitter (1970), Molle and Balassa are interested not only in the exclusivity of competences and the degree of centralization in decision-making but also the number of policy issues that member states seek to resolve collectively.

4. Article 6, Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions.

5. See Council Regulation (EU) No 1024/2013 of 15 October 2013 and Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014.

6. https://www.nao.org.uk/highlights/taxpayer-support-for-uk-banks-faqs/.

7. Euractiv (2014). ‘Poll: British support for EU membership hits 23-year high’ EURACTIV.com, 23 October.