ABSTRACT
As a consequence of the global financial crisis, many observers expected that the European Union would initiate and spur the reform of global finance. However, it turned out that the European endeavours have only been modest and unassertive so far. This contribution aims to explore this development. It argues that there are various causes of the European defeat, but that it is possible to identify some structural factors which enabled powerful political actors to defend a liberally organized financial market environment: externally, international communication and bargaining processes have been and still are structurally biased towards a liberal global financial order owing to the strong role of global financial centres and the dynamics of competitive deregulation; and internally, the emergence of a new European economy, based on financial market integration and manifold processes of financialization, has brought about fundamental changes of European capitalism as well as of societal and intergovernmental power relations.
ACKNOWLEDGEMENTS
A first draft of this contribution was presented in a workshop on ‘The EU in Global Finance’ at the University of Amsterdam (UvA), 14–15 February 2013. For helpful comments and advice I would like to thank two anonymous referees, Tony Porter, Daniel Mügge, and the other participants of the workshop.
Notes
1 Quite a few economies of Central and Eastern Europe have been confronted with similar sets of problems at an even earlier stage. However, as most of them lacked the advantage of being a member of European Monetary Union (EMU), they only disposed of weak levers to bail in European creditor countries.
2 Here, the term ‘crisis constitutionalism’ does not refer to constitutionalist changes in the strict sense of the word. Instead, it is derived from the political economic debate and the notion of ‘new constitutionalism’ invented by Stephen Gill (Citation1998). In general ‘new constitutionalism’ addresses the broader changes of international treaties and the institutional and regulatory embeddedness of transnational capitalism. While it can be seen as the outcome of rather systemic and depoliticized tendencies of insulating the management of market-liberal globalization from democratic control, the term ‘crisis constitutionalism’ represents more controversial, ambiguous and therefore politicized changes of the transnational judicial and institutional setting.
3 In view of the still sluggish economic development and financial strain, it seems rather likely that banks will use the long implementation phase of Basel III for achieving even more flexible rules and procedures.
4 However, it is not precluded at all that things might change in the future when China and the US make concessions in terms of a more multilaterally orchestrated exchange rate regime.
Additional information
Biographical note: Hans-Jürgen Bieling is professor of political economy at the Department for Political Science, Eberhard Karls University of Tübingen, Germany.