The Politics and Political Economy of Reinforcing the Euro Area and its Governance

Abstract

Since the outbreak of the Euro area’s sovereign debt crisis in Greece in 2009, there has been growing speculation as to changes in the area’s membership. An exit of the most affected countries – Greece in particular – is seen by many experts as the only way out of the crisis. However, the uncertainty created by the exit of one country from the Euro area and the threat of contagion have acted as a strong deterrent for European leaders. They fear a massive shock to global markets, Euro area collapse and the possible end of the EU integration process. European leaders have either supported or tolerated – in some cases begrudgingly – the incremental construction of support mechanisms to preserve the integrity of the Euro area and the reinforcement of fiscal rules. The aim of this panel is to analyse the political and political economic dynamics behind the adoption of new rules, instruments and procedures for saving and strengthening European Monetary Union (EMU). In connection with the overarching theme of the section, the purpose is also to assess to what extent decisions have brought the EU closer to the federal model. Thus we welcome papers that seek to analyse both the motivations and the implications of the ‘new EMU’ by addressing the following questions: How do the new mechanisms alter the balance of power or the distribution of competences between the EU and the Member States? Who are the actors who seek to promote or, in contrast, to resist a more federal Europe through the reform of EMU? Does the federal vision play a role in the discourses of national leaders to legitimise the measures towards their public opinion?

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