This chapter examines trade and development in line with European trade politics. It explains that the European Union holds full sway over external trade policy, a truly supranational competency equivalent to the powers of a federal state. Most European political economy scholars have engaged with the substantive area with an Open European Economy Politics approach, privileging society-centred instead of a state-centred analysis. The chapter covers the advantages of a more generic, socio-economic actor preference approach distinguishing different types of trade. It looks into how new global challenges have occasioned the EU to engage in a declared policy of strategic autonomy.
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9. Trade and Development
Dirk De Bièvre
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6. Financial Integration and Regulation
Lucia Quaglia
This chapter provides an overview of financial integration and regulation. It discusses the main issues at stake in the political economy of financial integration and regulation in Europe. Due to the recurrence of financial crises, the globalization of finance, the multi-level governance of financial services, and the large size and far-reaching influence of the financial sector, financial integration and regulation hold particular significance in the European political economy. Over time, financial integration increased in the European Union, which has harmonized regulations on a variety of financial services across Member States. The financial integration and regulation in Europe face several ongoing and future challenges, such as the incompleteness of the Banking Union and its asymmetric functioning.
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Introductory Chapter
European Political Economy: Mapping the Research Field
Manuela Moschella, Lucia Quaglia, and Aneta Spendzharova
The chapter conceptualizes European Political Economy as a distinct research field. It provides a genealogy of the field, detailing how EPE draws from several disciplines, including Comparative and International Political Economy, as well as European Studies. As part of this, the chapter identifies 4 key turning points in European integration that have helped defined the field and developed the scholarship. This chapter also summarises for theoretical approaches that offer important conceptual tools that students will use throughout the textbook to examine the dynamic interactions between politics and economics within the EU.
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10. European Political Economy and Interdependence
Elliot Posner
This chapter focuses on the correlation between the key concepts of European political economy and interdependence. It elaborates on the interplay between multi-level governance, Europeanization, globalization, and EU market integration. Essentially, the EPE cannot be understood without careful analysis of the interlinkages between the EU market-building project and the region's interdependent relationships with the rest of the world. The chapter then provides an overview of the main concepts surrounding globalization, regionalization, and general trade patterns of national markets. It notes the high likelihood that EU-level agents, processes, and structures are prime shapers in any given aspect of the EPE.
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11. Migration
Andrew Geddes and Leila Hadj Abdou
This chapter explores the impact of international migration on the political economy of contemporary Europe. It details the definitional issues, scale, and types of migration flows to Europe. The EU and its Member States shape the political economy of migration both externally and internally as well as the causes and effects of a key dynamic in the European political economy (EPE) of migration. The chapter examines the notions of the selectivity of migration policies and the militarization of borders. Additionally, politics and policymaking are driven by two powerful trends: the heightened politicization of migration in the EU and the trend towards greater selectivity in migration policies.
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3. Ideational European Political Economy
Lucia Quaglia, Aneta Spendzharova, and Manuela Moschella
This chapter introduces the key concepts of Ideational European Political Economy. It primarily focuses on actor-centred constructivism while discussing the significance of ideas and the key tenets and assumptions of the ideational approach. The Ideational approach builds on the constructivist literature, which involves the actor's interpretation of reality, appropriate policy goals, and the supportive coalition's identified goals. The chapter explains the ideational approach to EPE and posits that socially constructed elements matter in the institutional development and economic policies of the European Union. It then presents empirical examples of the ideational approach applied to major institutional and policy developments in EPE.
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12. Environment
Charlotte Burns and Neil Carter
This chapter considers a number of environmental issues at the heart of the European political economy. It looks at several key features that characterize the political economy of the environment in Europe. The rapid growth of EU environmental policy from the 1980s was underpinned by the economic rationale of establishing a level playing field to ensure a Single Market. Meanwhile, in 2019, the European Green Deal placed climate change and the environment at the heart of the EU's growth agenda. The chapter explains how Ideational and Critical and Feminist EPE approaches highlight the gaps between the EU's stated ambitions and the type of radical action required to achieve net zero.
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8. Economic Liberalism, Inequality, and Populist Backlash
Jonathan Hopkin
This chapter covers the interplay between economic liberalism, inequality, and populist backlash. It introduces the concept of anti-system politics, which overwhelmed the political systems of the European countries. The contours of backlash politics in Europe since the Global Financial Crisis of the late 2000s showcase how party systems have changed under pressure from hard-pressed voters facing stagnating living standards. Additionally, the causes and consequences of this backlash include how the crisis of the European economy has sparked political contestation and how political institutions responded to the aforementioned backlash. The chapter then considers analytical tools of European political economy to discuss the European countries' political upheaval and economic pressures that drive political instability.
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13. Health and Inequality
Jappe Eckhardt
This chapter discusses the main themes defining health policy as a growing field of scholarship within the European Political Economy (EPE). It primarily focuses on following four theoretical approaches: European Open Economy Politics, Growth Models EPE, Ideational EPE, and Critical and Feminist EPE. Due to increased transnational risks of pandemics, the determinants of health started to spill over national borders and private actors started to play a more prominent role in health policy. European political economy/international political economy scholars made great progress in understanding health policy outcomes and their implications, but their research agenda on health policy is still much less developed compared to more traditional issue areas. The chapter then considers possible notions for future research, such as regime complexity, and comparative capitalism.
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2. Growth Models and European Political Economy
Alison Johnston and Aidan Regan
This chapter discusses the theoretical underpinnings of Comparative Political Economy, which range between varieties of capitalism to Growth Models. It explains that Comparative Political Economy can help explain the absence of economic convergence within the European Union, while also focusing on national economies and welfare states of Member States. Additionally, a variety of empirical indicators showcase how divergence between the EU's Growth Models became a defining feature of the EU's political economy. The chapter then mentions that the rise of anti-system politics in Europe correlates to how poorly the EU and its Member States managed the fallout from the global financial crisis. It notes that European economic integration has primarily benefited Member States with export-oriented Growth Models.
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7. Welfare and Labour
Caroline de la Porte and Ilaria Madama
This chapter argues that welfare states and labour markets constitute a central issue in European political economy. It then discusses the main theoretical and empirical theories and concepts in regulating social policies and labour markets in the multi-tiered EU institutional setting. Under the Economic and Monetary Union (EMU), Member States aimed to enhance labour market participation, while modernizing their welfare states and maintaining a high level of social standards. The chapter presents three case studies on social investment. It also looks into the re-regulatory approach embodied in the European Pillar of Social Rights and the possibilities for selected social policies being fiscally supported through the Next Generation EU.
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4. Critical and Feminist European Political Economy
Angela Wigger and Laura Horn
This chapter explores the strength of critical and feminist approaches to European political economy. It explains that Critical and Feminist EPE plays an important role in demystifying dominant modes of understanding that strategically silence various forms of exploitation in capitalist power relations. Critical EPE seeks to understand the European Union in the context of the wider dynamics of global capitalism. Meanwhile, Feminist EPE focuses primarily on social power relations. The chapter elaborates on the state of the art of Critical and Feminist EPE with respect to theoretically informed explanations of crises and crisis responses and their social and political consequences. It highlights the importance of critical perspectives to analyse EPE and imagine an alternative future.
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5. Monetary Integration, Crises, and Solidarity
Waltraud Schelkle
This chapter argues that the notions of monetary integration, crises, and solidarity are key issues of European integration. It explains how international payments for trade became a major concern for policymakers in Europe's war-torn economies after the Second World War. Monetary-financial integration was fuelled by the single currency, which then resulted in a boom-bust cycle of international systemic proportions. The chapter then examines the euro and euro area crisis while considering why and how monetary integration advanced or failed to move forward. It looks into different models of capitalism in the euro area before detailing several neoliberal ideas underpinning the euro area.
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1. European Open Economy Politics
Mark Copelovitch and Stefanie Walter
This chapter outlines an Open Economy Politics (OEP) perspective on how national interests are formed and how they matter in European politics. It focuses on national economic interest, which defines the governments' preferences with regard to European economic policymaking. The key point of the OEP approach to European political economy is that national interests emerge in a process of upward aggregation. The chapter enumerates the major issues of the Euro crisis and Brexit under the OEP perspective. It highlights that the conflict between the distributional winners and losers over economic crises and economic policies sits at the very heart of European political economy.
