The Eurozone financial crisis sheds light on a mismatch: Although academic models of the Europolity have focussed on its non-state nature, political discourse has sticked to the federal model most notably for legitimating how the EU obtained new fiscal, economic and monetary powers during the crisis. In the first part, we show that at the same time, these quasi-federal models are at odds with the increasingly fragmented and intergovernmental nature of the EU.
In the second part, we explain this mismatch between federal vision and fragmented political process. The decisive factor seems to be ‘constraining dissensus’: EU polity development is now politicized in many countries, and decisions about the future shape of the EU are much more widely debated in public than during the ‘permissive consensus’ period until the 1990s. Majoritarian actors play an increasingly important role in EU polity development but are often severely constrained by public opposition. At the same time, there is strong interest group pressure and a strong functional demand to cope with policy externalities, fight against external shocks or realize economies of scale. As a result, federalist rhetoric prevails because it is the only publicly available symbolic reference point for EU development in a period where intergovernmentalism does not offer a valid blueprint for the EU’s institutional development any more (intergovernmentalism understood as a polity model, not as an explanatory theory).
We conclude by arguing that as a result, polity-making procedes in a fragmented way with a heavy emphasis on regulating core state functions and differentiated integration precisely because federal state making is blocked by constraining dissensus. Paradoxically, the higher the functional pressure for allocating core state powers to the EU level, the more difficult it becomes politically, resulting in regulation of core state powers but not in federation.
