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Chapter

Dermot Hodson and Uwe Puetter

This chapter discusses the European Union’s (EU) response to the euro crisis that emerged in late 2009, two years after the global financial crisis struck. It identifies the challenges this crisis has posed to the existing institutional set-up of economic and monetary union (EMU) and shows that it had a lasting impact on dicussions over the EU’s future well beyond its most dramatic moments. A timeline of the euro crisis is provided and the main changes to the institutional framework of European economic governance at the time of writing are reviewed. The chapter considers whether the crisis was caused by a deficit of centralized decision-making and whether it has served, in turn, as a catalyst for deeper economic and political integration in the euro area and the Union more generally. The consequences of the crisis for the EU’s legitimacy are also explored from competing theoretical perspectives.

Chapter

Dermot Hodson and Uwe Puetter

This chapter discusses the European Union’s (EU) response to the euro crisis that emerged in late 2009, two years after the global financial crisis struck. It identifies the challenges this crisis has posed to the existing institutional set-up of economic and monetary union (EMU) and shows that it had a lasting impact on discussions over the EU’s future well beyond its most dramatic moments. A timeline of the euro crisis is provided and the main changes to the institutional framework of European economic governance at the time of writing are reviewed. The chapter considers whether the crisis was caused by a deficit of centralized decision-making and whether it has served, in turn, as a catalyst for deeper economic and political integration in the euro area and the Union more generally. The consequences of the crisis for the EU’s legitimacy are also explored from competing theoretical perspectives.

Chapter

This chapter examines how the European Central Bank (ECB) has taken on new and controversial roles in relation to crisis management and financial supervision in the wake of the eurozone crisis. It also considers how the ECB’s transformation has encouraged a new wave of institutional theorizing about the Bank, placing emphasis, among other things, on the importance of credible commitments, path-dependence, strategic discourse, and the changing politics of European integration. The chapter first provides an overview of the ECB’s mandate and tasks before discussing its decision-making bodies. It then describes the ECB’s institutional design as well as its response to the euro crisis, along with various theories that explain the crisis, including historical institutionalism and the rational choice institutionalist perspective. The chapter concludes by assessing concerns about the ECB’s legitimacy.

Chapter

This chapter examines the transatlantic partnership between Europe and the United States. It first considers US strategic interests and how they are now changing, along with the implications of this shift for US foreign and defence policy priorities. It then describes some of the fundamental challenges faced by the European Union, including over-expansion, the demise of the Warsaw Pact, the euro crisis, a deteriorating regional environment, the persistence of nationalism, and the refugee crisis. It argues that these challenges threaten the liberal order that is one of the West’s most salient achievements, raise serious questions about the EU’s long-term future, and make Europe a less reliable and valuable partner for the United States. The chapter concludes with an assessment of possible prospects for the US-Europe relations, including the (slim) possibility of a genuine renewal in transatlantic ties.

Chapter

12. Litmus Tests for European Integration Theories  

Explaining Crises and Travelling beyond Europe

Tanja A. Börzel and Thomas Risse

This chapter deals with two litmus tests for theories of European integration. The first part asks, how and to what extent various approaches can explain the contemporary crises of European integration. It thereby tackles the question of whether European integration theories might have biased EU scholars towards ignoring evidence for (dis-)integration. While being more optimistic about the state of the Union than many EU scholars are, the authors of this chapter argue for a more differentiated conceptualization of integration as a continuous variable that takes disintegration, rather than stagnation or no integration, as the opposite value of integration. The second part of the chapter examines to what extent European integration theories are able to shed light on experiences with regionalism across the globe. It argues that they do provide plausible accounts for the emergence of regionalism around the world. Comparing regions points to important scope conditions under which European integration theories operate. When it comes to outcomes, however, they need to be complemented by explanations emphasizing diffusion to clarify why and when states are more inclined to pool and delegate sovereignty in some regions than in others.

Chapter

The chapter presents a short overview on social constructivism as a distinct research programme and shows what it contributes to the study of European integration. Social constructivism represents a meta-theory or an ontology, not one more substantive theory of European integration. The substantive contribution of social constructivism to the various theories of European integration is to insist on taking meaning construction, discourse, and language seriously, and to point out the mutual constitution of agency and structure. Moreover, social constructivism emphasizes the constitutive features of social institutions including the EU as not just constraining behaviour, but also affecting the identities, interests, and preferences of actors. The chapter then uses the question of European identity to illustrate empirically social constructivism ‘at work’. A constructivist account of the euro and the migration crises demonstrates that European political leaders reacted largely to the mobilization of exclusive-nationalist identities by (mostly) right-wing populist parties and movements. In sum, the social constructivist research programme in EU studies has quickly left the stage of meta-theorizing and concern for ontology and epistemology behind, and has now entered the realm of concrete empirical work dealing with real puzzles of European political life.

Chapter

11. The institutions of Economic and Monetary Union:  

from the euro crisis to COVID-19

Dermot Hodson

Since 1999, a subset of EU member states—known collectively as the euro area—has delegated exclusive competence for monetary policy to the European Central Bank (ECB), while giving limited powers to the European Commission, ECOFIN, and the Eurogroup in other areas of economic policy. The euro crisis provided the first major test of the Economic and Monetary Union (EMU), as a sovereign debt crisis spread between member states and threatened to tear the single currency apart. The ECB and two new institutions—the European Stability Mechanism and Euro Summit—helped to keep the euro area together but at significant economic and political cost. EU institutions were better prepared for the initial economic consequences of the COVID-19 pandemic, but the crisis still produced important institutional changes. The COVID-19 recovery fund Next Generation EU gives the Commission and Council a major new role in economic policy, albeit a temporary one for now. The EMU illustrates three key dimensions of EU institutional politics: the tension between intergovernmental versus supranational institutions, leaders versus followers, and legitimacy versus contestation. It also reveals the explanatory power of new institutionalism among other theoretical perspectives.

Chapter

This chapter examines the various attempts to create the economic and monetary union (EMU), which first became an official objective of the European Community (EC) in 1969 but was achieved only thirty years later. The chapter first provides a historical background on efforts to create the EMU, including long-standing debates between France and West Germany on its design, before discussing the launch of the single currency, the euro, and its subsequent progress up to and including the eurozone crisis in the late 2000s. On the eurozone crisis, it considers both the short-term efforts at crisis management and the long-term reforms that were implemented in an attempt to prevent further crises. Finally, it considers some of the explanations for and critiques of EMU, including critiques of the responses to the eurozone crisis that have been offered by various academic commentators.

Chapter

2. The history of EU institutions:  

seven decades of institutional change

Renaud Dehousse and Paul Magnette

EU institutions have frequently been reformed since the origins of what is now the European Union (EU), and particularly so over the past twenty years. This chapter explains why and how this quasi-constant change has taken place. It begins by identifying five phases in this history: the founding, consolidation, relaunch, adaptation, and the current phase of reaction to functional challenges. The chapter then assesses the respective weight of state interests, ideas, and institutions in the evolution of EU institutions. In retrospect, institutional change in the EU appears to have followed a functionalist logic, leading to complex compromises that, in turn, prompt regular calls for ‘simplification’ and democratization.

Chapter

This chapter examines the history of European Union institutions, and especially the quasi-constant change that has taken place since the creation of the EU. It begins with a discussion of five phases of EU institutional development: the founding, consolidation of the European Community model, institutional change through task extension, reform of the institutional system, and the brief ‘constitutional’ moment at the turn of the century. It then considers the euro crisis and Brexit, along with the respective weight of state interests, ideas, and institutions in the evolution of EU institutions. It shows how institutional change in the EU seems to have followed a functionalist logic, leading to complex compromises that, in turn, prompt regular calls for ‘simplification’ and democratization.

Chapter

After twenty years of continuous deepening and widening, European integration has entered an era of recurrent crises. Most students of the European Union (EU) seem to agree that the constitutional equilibrium between intergovernmental and supranational institutions has changed. Some see ‘new intergovernmentalism’ and ‘integration without supranationalization’ prevailing. Others contend that we are witnessing a series of functional and institutional spillovers empowering supranational institutions. This chapter argues that governance approaches are particularly useful to address the puzzling counter-positions represented in the current debate about the ‘nature of the beast’. They are better equipped to explore how and to what end institutional structures and processes have responded to the crises than mainstream integration theories. The chapter starts with introducing the ‘governance turn’ in EU studies as the attempt of EU scholars in the early 1990s to capture the nature of the EU. It then presents a typology that is based on a broad concept of governance as institutionalized forms of political coordination. The empirical part of the chapter uses this typology to give an overview of the structures and processes of EU governance before applying it to the financial and the migration crises. The chapter concludes with a discussion of the major challenges for European integration (theories) from a governance perspective, particularly with regard to managing current and preventing future crises.

Chapter

This chapter considers the structure and functions of the Court of Justice of the European Union. It first traces the history and development of the European Court of Justice before discussing its structure and functions. In particular, it describes the composition of the Court, judicial appointments, what the Court does, enforcement proceedings, actions for judicial review, and the preliminary rulings procedure. The chapter goes on to explain how the Court works in a practical sense by focusing on its judicial chambers. It also examines the wider political environment in which the Court operates, such as its role in addressing the regulatory steps taken to manage the ongoing euro crisis or the issue of EU citizenship in relation to free movement rights. The chapter also offers some reflections on the nature and influence of the Court and concludes by analysing its relationship with the European Court of Human Rights.