EMU and political union: what, if anything, have we learned from the euro’s first decade?
TL;DR: This paper revisited a selection of these arguments ten years after the launch of the euro and found little evidence to corroborate claims that EMU will spur political union either out of functional necessity or the intentional choice of euro area members.
Abstract: The road to Maastricht and the eventual launch of economic and monetary union (EMU) fuelled debate among scholars and policy-makers about the relationship between monetary and political integration in Europe. This article revisits a selection of these arguments ten years after the launch of the euro. It finds little evidence to corroborate claims that EMU will spur political union either out of functional necessity or the intentional choice of euro area members. If anything, the projects of monetary and political integration in Europe show tentative signs of decoupling.
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Book•
18 Mar 2010TL;DR: Juncke as mentioned in this paper discusses the past, present and future of the Stability and Growth Pact and its implications for European integration theory, including the role of experts and ideas in good and bad times.
Abstract: Foreword Jean-Claude Juncke 1. The politics of the Stability and Growth Pact Part I: 2. States, intergovernmentalism and negotiating the SGP 3. Opening the box: a domestic politics approach to the SGP 4. The functional logic behind the SGP 5. The role of experts and ideas Part II: 6. Implementation of the SGP in good and in bad times 7. From bad times to crisis 8. The SGP before the European Court of Justice 9. The SGP in times of financial turbulence and economic crisis 10. Conclusion: the past, present and future of the SGP and implications for European integration theory Appendix.
149 citations
TL;DR: The authors review the initial predictions and claims regarding economic and monetary union (EMU) in Europe against the evidence of its first ten years of existence and argue that pessimistic views on the creation of EMU have proved to be wrong.
Abstract: We review the initial predictions and claims regarding economic and monetary union (EMU) in Europe against the evidence of its first ten years of existence. We argue that pessimistic views on the creation of EMU have proved to be wrong. Yet EMU's success is rather puzzling, since it is based on a peculiar institutional structure not thought to lead to success. EMU has generated redistributive effects and may have increased business-cycle synchronization. Those effects have not translated into the expected decrease of legitimacy or a widespread democratic deficit of EMU. At the institutional level, EMU has coped well with an asymmetric framework, largely decoupling EMU from political union. There have been neither major spill-over effects pushing for further political integration nor conflict and disintegration. The main question for the future is whether this institutional structure will stay the same in the aftermath of the global financial crisis.
32 citations
Cites background from "EMU and political union: what, if a..."
...The peculiar mixture of national and European interests across formal, semi-formal and informal bodies and fora has seemed to work just fine (see Hodson 2009)....
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Posted Content•
TL;DR: In this article, the authors examine how and why the institutional framework governing EMU has evolved since the creation of the euro and investigate to what extent functional spillovers from the single currency into other policy domains, like macroeconomic policies or financial regulation, met with an adequate institutional response, and how the existing institutional framework conditioned the response to the financial crisis.
Abstract: This Occasional Paper examines how and why the institutional framework governing EMU has evolved since the creation of the euro. Building on theories of institutionalism, the paper in particular investigates to what extent functional spillovers from the single currency into other policy domains, like macroeconomic policies or financial regulation, met with an adequate institutional response, and to what extent the existing institutional framework conditioned the response to the financial crisis. The interaction between policy requirements and institutional capabilities is examined both in 'ordinary times' (1999-2007) and under 'crisis conditions' (2007-10). The paper uses a typology of change which helps to put into perspective both the resilience of the institutional framework of EMU and its capacity to adapt. In this respect, it allows for a better understanding and framing of the current reforms of EMU economic governance. It concludes that even though the crisis will accelerate institutional development, it will do so only gradually, as path dependence and an inbuilt bias towards incremental change will prevent policy-makers from pursuing a 'clean slate' strategy.
20 citations
TL;DR: The authors examined how the International Monetary Fund (IMF) responded to the challenges presented by Economic and Monetary Union (EMU) between the signing of the Maastricht Treaty in 1992 and the launch of the euro in 1999.
Abstract: How do regional changes affect the process of global governance? This article addresses this question by examining how the International Monetary Fund (IMF) responded to the challenges presented by Economic and Monetary Union (EMU) between the signing of the Maastricht Treaty in 1992 and the launch of the euro in 1999. Based on primary research from the IMF archives, the article illustrates how the IMF's efforts to reconfigure its relationship with European institutions evolved gradually through a logic of incremental change, despite initial opposition from member states. The article concludes that bureaucratic actors within international organizations will take advantage of informal avenues for promoting a new agenda when this fits with shared conceptions of an organization's mandate. The exercise of informal influence by advocates for change within an international organization can limit the options available to states in formal decision-making processes, even when these options cut across state prefere...
18 citations
Cites background from "EMU and political union: what, if a..."
...…not examine the contemporary dynamics of IMF–EU bailout packages for distressed eurozone economies, nor does it seek to establish why the fiscal rules set up to govern Economic and Monetary Union (EMU) in Europe broke down after the euro was introduced (Heipertz and Verdun 2010; Hodson 2009, 2011)....
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References
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TL;DR: In this paper, the authors present an overview of economic integration in a common market, including the following: 1. Introduction Part 1: The Statics of Economic Integration 2. Commodity Movements: Production Aspects 3. Consumption and Welfare Aspects 4. Factor Movements Part 2: The Dynamics of economic Integration 5. National Frontiers and Economic Growth 6. Economies of Scale 7. External Economies 8. Further Dynamic Factors Part 3: Integration and Economic Policy 9. Regional Problems in a Common Market 10. Harmonization of Social Policies 11. Fiscal Problems in
Abstract: 1. Introduction Part 1: The Statics of Economic Integration 2. Commodity Movements: Production Aspects 3. Commodity Movements: Consumption and Welfare Aspects 4. Factor Movements Part 2: The Dynamics of Economic Integration 5. National Frontiers and Economic Growth 6. Economies of Scale 7. External Economies 8. Further Dynamic Factors Part 3: Integration and Economic Policy 9. Regional Problems in a Common Market 10. Harmonization of Social Policies 11. Fiscal Problems in a Union 12. Monetary Unification and the Balance of Payments
1,028 citations
"EMU and political union: what, if a..." refers background in this paper
...The Hungarian economist Bela Balassa (1961) famously distinguished between the five stages of economic integration: (i) a free trade area in which tariffs and quantitative restrictions on commodities have been removed; (ii) a customs union which combines a free trade area with equalized tariffs vis-àvis third parties; (iii) a common market in which barriers to the free movement of capital and labour are also eliminated; (iv) an economic union involving some degree of harmonization between national economic policies; and (v) a complete union characterized by the unification of monetary, fiscal, social and countercyclical policies under the control of a supranational authority....
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...The Hungarian economist Bela Balassa (1961) famously distinguished between the five stages of economic integration: (i) a free trade area in which tariffs and quantitative restrictions on commodities have been removed; (ii) a customs union which combines a free trade area with equalized tariffs…...
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...Perhaps its most contentious assumption is to follow Balassa (1961) in equating political union with the centralization of decision-making at the EU level....
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Journal Article•
TL;DR: In this paper, the authors discuss how the macro-economics of EMU influenced different European models of capitalism, how the Single Market was received in the different institutional regimes in European capitalism, welfare and labour market reforms are debated and implemented, and how European capitalism travelled east after 1989.
Abstract: Since the early 1990s, Europe's economies have been facing several new challenges: the 1992 single market programme, the collapse of the Berlin wall and eastward enlargement, and monetary unification. Building on the influential Varieties of Capitalism (VoC) perspective, first elaborated in detail in the book Varieties of Capitalism (OUP, 2001), this book critically analyzes these developments in the European political economy and their effects on the continental European economies. Leading political economists from Europe and the US debate how VoC can help understand the political-economic challenges that Europe is facing today and how understanding these new challenges can in turn enrich and enhance the VoC perspective. Thematically, the contributions to this volume are organised in four sections: * how the macro-economics of EMU influenced different European models of capitalism, * how the Single Market programme was received in the different institutional regimes in European capitalism, * how welfare and labour market reforms are debated and implemented, * how European capitalism travelled east after 1989. Preceding this is a spirited defence of the VoC approach by Peter Hall, and an introduction from the volume editors, considering the approach, and proposing extensions and amendments. This book demonstrates that the VoC approach remains, as the editors put it in their introduction, a rich seam to mine, capable of accommodating new developments, and theoretically flexible enough to branch out into new arguments.
489 citations
"EMU and political union: what, if a..." refers background in this paper
...Imposing a common approach to economic reform could do more harm than good in member states that rely on different varieties of capitalism (see Hancké et al. 2007)....
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Posted Content•
TL;DR: The Road to Maastricht as mentioned in this paper provides an authoritative account of the boldest and riskiest venture in the history of European integration, focusing on the motives that inspired European political leaders, strategies that they pursued, and the institutions that were used to achieve monetary union.
Abstract: Economic and monetary union in the European Union represents a massive change for Europe and for the world. The Road to Maastricht identifies why the agreement was possible and how the agreement was made. The book examines the motives that inspired European political leaders, the strategies that they pursued, and the institutions that were used to achieve monetary union. Drawing on a wide range of sources and unprecedented research and interviews, the book combines careful political analysis with new information about the way in which European Monetary Union was negotiated. It delves into the complex forces at work in Europe, including the cross-national political interactions, to produce an authoritative account of the boldest and riskiest venture in the history of European integration.
458 citations
"EMU and political union: what, if a..." refers background in this paper
...The basic tenet of coronation theory is that a high degree of economic convergence coupled with measures to co-ordinate economic policies and promote solidarity with countries were required to ensure the sustainability of the single currency (Dyson and Featherstone 1999: 291)....
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TL;DR: In this paper, the authors explore the development of the open method of co-ordination, addressing whether it is a new form of governance from two related perspectives: to what extent can the method be effectively applied outside the scope of economic policy, and will it lead to policy transfer to the EU and hence act only as a transitional mode of governance?
Abstract: Taking economic co-ordination in EMU as a starting point, this article explores the development of the open method of co-ordination, addressing whether it is a new form of governance from two related perspectives. First, to what extent can the method be effectively applied outside the scope of economic policy? Second, will it lead to policy transfer to the EU and hence act only as a transitional mode of governance? Identified at the Lisbon European Council, the method codified practices such as benchmarking, target-setting and peer review developed in the Luxembourg, Cardiff and Cologne processes. The method offers a new approach to governance of the EU as a heterarchical, decentred and dynamic process. It supports and radicalizes the principle of subsidiarity; offers an alternative to the treaty rules on enhanced co-operation; and addresses some of the legitimacy issues inherent in the EU. In EMU, the method arose out of a specific policy framework with a common monetary policy complemented by the coordination of national economic policies. The recent recommendation issued against Ireland is the first example of the operation of the method in EMU and shows how debate can be stimulated and how different and arguably equally valid perspectives defended. The particular experience of EMU with a sound money, sound finance paradigm, a long history of project-building by key elites and the central role of the European Council suggest similar conditions are required for the effective application of the method in other policy spheres. The context within which the method has operated to date is contingent and could change either over time or between policy fields. If so, the very openness of the method may serve to reconfigure the boundaries of competence between the Member States and the Union, after all.
445 citations
"EMU and political union: what, if a..." refers background in this paper
...…under EMU have steered well clear of encouraging a further centralization of economic policy, relying instead on new modes of policy-making that assign responsibility for policy formulation and implementation to member states rather than to supranational institutions (Hodson and Maher 2001)....
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...Attempts to strengthen economic policy co-ordination under EMU have steered well clear of encouraging a further centralization of economic policy, relying instead on new modes of policy-making that assign responsibility for policy formulation and implementation to member states rather than to supranational institutions (Hodson and Maher 2001)....
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17 May 2007
404 citations
"EMU and political union: what, if a..." refers background in this paper
...Imposing a common approach to economic reform could do more harm than good in member states that rely on different varieties of capitalism (see Hancké et al. 2007)....
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