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Theories of federalism can provide a set of assumptions, concepts, and arguments that shed light on many aspects of European integration. Applying the federalism perspective opens up EU scholars to a range of relevant comparative cases that provide analytic leverage and insight on the EU. This perspective also enables EU scholars to draw on and contribute to a well-established literature in comparative politics, thus connecting their findings about the EU to broader academic debates. EU scholars have applied theories of federalism to help explain a wide range of questions about European integration, from general questions about why and how the EU came together as a political system to narrow questions about very specific policy areas, to the causes and consequences of the EU’s recent crises. This chapter discusses the main assumptions, concepts, and methodologies in federalism theories of the EU, and explores how this perspective can shed light on the eurozone crisis and the crisis of democratic backsliding among EU member states.

The political economy of Europe has changed significantly in the last four decades because of globalization, the collapse of communism, and financial crises. This chapter first discusses the different varieties of capitalism that emerged in Europe after World War II. It looks at how they have been put under pressure by economic internationalization and the dominance of neoliberal ideas, which together have weakened economic management at nation-state level. The chapter also looks at the development of capitalism in Eastern Europe and explanations for variance in post-communist capitalist development. Finally, the chapter considers the challenges to the management of Europe’s political economy posed by the international financial crisis that dominated much of Europe’s politics after 2007, along with the initial response to the economic crisis caused by the coronavirus pandemic in 2020.

This chapter focuses on the historical development of the European Union. The history of the EU began when European governments responded to a series of domestic, regional, and global challenges after the Second World War by establishing new transnational institutions in order to accelerate political and economic integration. These challenges ranged from post-war reconstruction to the Cold War, and then to globalization. Driven largely by mutually compatible national interests, Franco-German bargains, and American influence, politicians responded by establishing the European Communities in the 1950s and the EU in the 1990s. The chapter examines the Schuman Plan, the European Defence Community, the European Community, the Economic and Monetary Union (EMU), enlargement, constitution building, and the Eurozone crisis.

This chapter examines the crises that dominated the period after the Lisbon Treaty was adopted in 2009: first, the eurozone crisis that began in 2009 and threatened the existence of the single currency; second, the refugee crisis that unfolded from 2015 as large numbers of refugees fled an intensifying war in Syria and attempted perilous crossings of the Mediterranean Sea; third, Britain’s decision to leave the EU, which followed a referendum on membership in 2016; and finally, the challenge of populist politics in the EU, with reference to the emergence of governments led by or including populist parties in Hungary, Poland, and Italy. The chapter then considers other developments during this period, including elections to the European Parliament (EP) in 2014 and 2019, a further enlargement to include Croatia in 2013, and the launch of the ‘Europe 2020’ strategy. It also looks at the United Kingdom’s adoption of a series of measures that raised doubts about its future relationship with the EU.

This chapter examines the European Union’s original decision to create a single market and the moves to complete the internal market — what became known as the single market programme — in the 1980s. The economic ideal of a common or single European market lies at the core of the EU. The decision to institute a drive to achieve a single internal market by the end of 1992 played a key role in the revival of European integration. The chapter first traces the development of internal-market policy before discussing the record of implementation beyond 1992. It then considers recent policy developments in relation to the single market in the context of the eurozone crisis which began in 2009. It also reviews the academic literature on the single market, focusing on the main explanations for its development and some key ideological or normative perspectives on its consequences.

This chapter explores Greece’s turbulent and ambivalent relationship with European integration. Despite initial hesitation during the initial stages of EU membership, Greece grew into one of the most pro-European member states. This enthusiasm ended abruptly after 2010 with the eurozone crisis and resultant EU–IMF bailout agreements that necessitated unpopular reforms and austerity. Consequently, Greece witnessed a seismic change in its party system, with a dramatic increase in the popularity of anti-system parties on both the Left and the Right of the political spectrum. Euroscepticism became more prevalent among Greek voters who blamed foreign actors (such as the EU, the IMF, Germany) and their domestic interlocutors for the country’s economic hardship. Greece’s Europeanization has been difficult, not least because of endemic weaknesses in public administration and the public policy process. EU-driven adaptational pressures on policy, polity, and institutions have been severely mitigated by entrenched veto points at the domestic level.

This chapter focuses on the historical development of the European Union. The history of the EU began when European governments responded to a series of domestic, regional, and global challenges after the Second World War by establishing new transnational institutions in order to accelerate political and economic integration. These challenges ranged from post-war reconstruction, to the Cold War, and then to globalization. Driven largely by mutually compatible national interests, Franco-German bargains, and American influence, politicians responded by establishing the European communities in the 1950s and the EU in the 1990s. The chapter examines the Schuman Plan, the European Defence Community, the European Community, the Economic and Monetary Union (EMU), enlargement, constitution building, and the Eurozone crisis.

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. In December 1969, the Hague Summit meeting of the EC heads of government made a commitment to the achievement of EMU ‘by 1980’. However, France and West Germany disagreed over how to do it. Germany made anti-inflationary policies the priority, while France made economic growth the priority, even at the risk of higher inflation. The chapter first provides a historical background on efforts to create the EMU 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. It also considers some of the explanations for and critiques of EMU that have been offered by various academic commentators.

This chapter examines the eurozone crisis that dominated the period after the Lisbon Treaty was adopted in 2009 and the challenges it presented for European institutions. It shows that the eurozone crisis affected European Union member states in starkly diffrent ways and that acute disagreements emerged over the appropriate reform agenda, particularly between ‘debtor’ and ‘creditor’ countries. The chapter first provides an overview of how the eurozone crisis unfolded before discussing the politics of the crisis and how it led to the increased relevance of intergovernmentalism within the EU, along with national government power in the crisis context. It then considers other developments during this period, including elections to the European Parliament, a further enlargement to include Croatia in 2013, and the launch of ‘Europe 2020’ strategy. It also looks at the United Kingdom’s adoption of a series of measures that raised doubts about its future relationship with the EU.

The European Union (EU) is without question the most densely institutionalized international organization in the world, and the body of literature known under the rubric of ‘the new institutionalism’ has been applied with increasing success to the study of the Union as a polity and to European integration as a process. This chapter examines rational choice and historical institutionalism and their contributions to EU studies. Following a brief introduction, it traces the origins of rational choice and historical institutionalism, both of which explore the role of institutions in political life, albeit with different emphases. Next, it turns to the EU, exploring the ways in which scholars have drawn on institutionalist theories to understand and explain the legislative, executive, and judicial politics of the EU, as well as the development of EU institutions and policies over time. An in-depth case study applies institutionalist theory to the task of explaining the origins of the Eurozone sovereign debt crisis as well as the EU’s response. Historical institutionalist theory, the author suggests, generates important insights into the suboptimal design of the original Maastricht EMU provisions, as well as the EU’s incremental response and the suboptimal outcome of the crisis. The author concludes by suggesting that institutionalist theories offer a variety of valuable insights into the design, effects, and development of EU institutions, while at the same time remaining compatible with other theoretical approaches in the EU scholar’s toolkit.

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.

This chapter examines how France's dissatisfaction with de facto German dominance of the European Monetary System (EMS) set the European Community (EC) on the road to the economic and monetary union (EMU) in the late 1980s. It first considers the conduct and outcome of the Maastricht negotiations on EMU before discussing the rocky road to the launch of the single currency in 1999 and the experience of EMU since then. In particular, it analyses the difficulty of enforcing the Stability and Growth Pact for fiscal discipline among participating member states. It also looks at the Delors Committee and the role of Bundesbank president Karl-Otto Pöhl. Finally, the chapter explores attempts to coordinate fiscal policy management as well as the onset and impact of the eurozone crisis.