The Eurozone crisis and the European corporate elite: bringing corporate actors into focus

This paper uses a framework referred to as the ‘corporate reconstruction of European capitalism theory of integration’ to analyse the European Union’s response to the Eurozone crisis. Most political economy analyses of the Eurozone crisis have focused on political leaders, clashes between creditor and debtor member states and public opinions in analysing the handling of the crisis. This paper focuses instead on the input of corporate actors. It is argued that both the setting up of the European Monetary Union (EMU) and the handling of its crisis were congenial to corporate preferences. Europe’s nascent corporate elite was concerned with eliminating currency risk when the EMU was set up and therefore did not push for fiscal federalism. When the flawed architecture of the Eurozone transformed that currency risk into sovereign credit risk, corporate preferences adapted and now favoured fiscal liability pooling and ultimately the setting up of a fiscal union.     

Beliefs of political leaders: conditions for change in the Eurozone crisis

Abstract

Leadership studies research reveals that political leaders’ beliefs affect their political and policymaking behaviour, especially in times of crisis. Moreover, the level of flexibility of these beliefs influences the likelihood that groups of leaders come to collective decisions. Insight into when and why political leaders do, in fact, change their beliefs is sorely lacking. This paper uses fuzzy-set Qualitative Comparative Analysis (fsQCA) to examine the antecedents of belief changes among 12 European leaders, all working in the realm of economic policy. Its findings reveal how increases in unemployment and unsustainable debt, as well as different government ideologies and increases in Euroscepticism lead to economic belief changes. In so doing, this paper begins to open the ‘black box’ of when, why, and under what conditions leaders change their beliefs.     

Democracy without choice: Citizens’ perceptions of government autonomy during the Eurozone crisis

In this article it is argued that citizens take into account the degree of a government's political autonomy to implement particular policies when expressing their views on satisfaction with democracy (SWD) but, in order to do so, they need to perceive it. When citizens directly observe the external constraints that reduce their government's autonomy, then variations in levels of regime satisfaction may no longer be exclusively about government performance – as widely argued by political economists – but also about democratic choice. The argument develops after comparing the existing scenarios in the Eurozone before and after the Great Recession. Citizens only began to perceive their own lack of choice to decide between policy alternatives when the sovereign debt crisis broke out in May 2010, the date of the first Greek bail‐out. It is then when citizens started to update their beliefs about the functioning of democracy as a system in which alternative policies can be adopted as bail‐out deals were signed between national governments from the Euro periphery and the Troika. This updating process towards the way democracy works explains the increasing gap in the levels of SWD between bailed‐out economies and the rest of the countries in the Eurozone. Empirical confirmation for this claim is found after analysing Eurobarometer surveys from 2002 to 2014 and using a two‐step difference‐in‐difference analysis that combines individual and aggregate data.     

State-led wage devaluation in Southern Europe in the wake of the Eurozone crisis

South European labour markets have gone through a substantial level of downward adjustment in wages (internal devaluation) and liberalisation in the aftermath of the Eurozone crisis. Yet, there have been differences in the extent of change between Greece, Portugal, Spain and Italy. These differences cannot be explained by the size of the economic crisis alone. While existing analyses focus on the extent of external pressure or party ideologies, this article focuses on the pre-existing level of regulation by the state as opposed to regulation by social partners. It shows that devaluation and liberalisation were the most extensive in countries where governments possessed more tools to force down wages (statutory job protection, state regulations of collective bargaining, minimum wages), sometimes even against the will of employers. In contrast, countries with a higher level of autonomy for social partners (and fewer policy instruments available to governments to influence wages) devalued less. In some cases, the crisis led to more power to the state, rather than less. The article shows that state intervention can be a facilitator rather than a barrier to wage adjustment.     

Technocratic attitudes and voting behaviour ten years after the Eurozone crisis: Evidence from the 2019 EP elections

The onset of the Great Recession raised the profile of technocracy, or government by experts, as a contrasting model to democracy. Yet, there is little research on how attitudes towards technocracy may impact European citizens' political behaviour. Moreover, the consistency of technocracy supporters' political attitudes, especially towards the EU, is questionable. This paper uses new survey panel data collected before and after the European parliament elections in May 2019 in six countries (Belgium, Germany, Greece, Ireland, Portugal and Spain). We investigate how citizens’ technocratic attitudes affect their voting behaviour in the European elections. We find evidence that citizens with technocratic attitudes are less likely to support mainstream parties, and tend to either abstain or, if they vote, to give their vote to anti-system parties, especially from the populist right. In addition, by distinguishing technocracy supporters according to their partisanship, we conclude that technocracy is a thin ideology that can be combined with different patterns of political support: while many technocracy supporters have no party identification or support non-mainstream parties and show dissatisfaction with democracy and the EU, another subgroup of technocracy supporters identifies with a mainstream political party and show above average political support and support for the EU.     

Power and changing modes of governance in the euro crisis

Which European Union actors are most powerful in the governance of the euro crisis? The euro crisis has reignited the classic debate between intergovernmentalists, who tend to stress the coercive power of dominant member states in the European Council, and supranationalists, who maintain that through the use of institutional power, the Commission, and the European Central Bank turned out the “winners” of the crisis. This article argues that euro crisis governance is best understood not just in terms of one form of power but instead as evolving through different constellations of coercive, institutional, and ideational power that favored different EU actors over the course of the crisis, from the initial fast‐burning phase (2010–2012), where the coercive and ideational power of Northern European member states in the European Council was strongest, to the slow‐burning phase (2012–2016), when greater influence was afforded supranational actors through the use of ideational and institutional power.     

Preferences for International Redistribution: The Divide over the Eurozone Bailouts

Why do voters agree to bear the costs of bailing out other countries? Despite the prominence of public opinion in the ongoing debate over the eurozone bailouts, voters' preferences on the topic are poorly understood. We conduct the first systematic analysis of this issue using observational and experimental survey data from Germany, the country shouldering the largest share of the EU's financial rescue fund. Testing a range of theoretical explanations, we find that individuals' own economic standing has limited explanatory power in accounting for their position on the bailouts. In contrast, social dispositions such as altruism and cosmopolitanism robustly correlate with support for the bailouts. The results indicate that the divide in public opinion over the bailouts does not reflect distributive lines separating domestic winners and losers. Instead, the bailout debate is better understood as a foreign policy issue that pits economic nationalist sentiments versus greater cosmopolitan affinity and other‐regarding concerns.     

From the rule of law to the rule of rules: technocracy and the crisis of EU governance

This article focuses on two trends emerging through the eurozone crisis, both of which diminish the quality of democracy in the EU and its member states. Firstly, the crisis has led to an increased reliance on non-majoritarian institutions, such as the ECB, at the expense of democratic accountability. Secondly, the crisis has led to a new emphasis on coercive enforcement at the expense of the voluntary cooperation that previously characterised (and sustained) the EU as a community of law. Thus, the ECB’s (over-)empowerment is a synecdoche of a wider problem: The EU’s tendency to resort to technocratic governance in the face of challenges that require political contestation. In the absence of opportunities for democratic contestation, EU emergency governance – Integration through Crisis – oscillates between moments of heightened politicisation, in which ad hoc decisions are justified as necessary, and the (sometimes coercive) appeal to the depoliticised rule of rules.     

The Contested Politics of Public Value

The emerging field of public values helpfully focuses on the norms and government policies that serve the public interest, but its analysis neglects the barriers to actually creating public value in contemporary America. Chief among these barriers are contending strains of public beliefs and opinions, the disproportionate influence of affluent individuals and business and professional associations, as well as governing structures predisposed toward inaction and drift. This article contrasts the expectations of the public values field with research on American politics to identify barriers to advancing the public interest under current conditions. Although public values scholars offer an analysis of American public life that is inadequate, they do raise challenging questions about how a public‐regarding agenda can be “designed in” to politics and policy. The article concludes by suggesting feasible reforms to improve the conditions for pursuing the public interest.     

Post‐crisis reforms in banking: Regulators at the interface between domestic and international governance

Post‐crisis international standards have been agreed on in certain areas of banking regulation, namely capital, liquidity, and resolution, but not others, namely bank structure – why? We articulate a two‐step analytical framework that links the domestic and international levels of governance. In particular, we focus on the role of domestic regulators at the interface between the two levels. At the domestic level, regulators evaluate externalities and adjustment costs before engaging in cooperation at the international level. This analysis explains why regulators in the United States and the European Union act as pacesetters, foot‐draggers, or fence‐sitters in international standard setting; that is to say, why they promote, resist, or are neutral toward international financial standards. At the international level, we explain the outcome of international standard setting by considering the interaction of pacesetters and foot‐draggers.     

The Contested Council: Conflict Dimensions of an Intergovernmental EU Institution

Recent research has tried to uncover the political space in which the Council of Ministers of the European Union decides. Rather than the left-right conflict or a cleavage between governments with national and supranational attitudes, this article shows that a redistributive dimension, decisively shapes the interactions in this most important legislative body of the European Union. In contrast to extant studies, we employ ex ante rather than ex post preference data and rely on correspondence analysis as a means to identify the underlying dimensions of contestation. The article concludes with an empirical investigation of how enlargement will affect the emerging political space within the European Union. Our quantitative analysis suggests that the gulf between net-contributors and net-receivers will further deepen.     

The judicialisation of EMU politics: Resistance to the EU's new economic governance mechanisms at the domestic level

Courts are increasingly asked to deal with fundamental political disagreements in liberal democracies. Because of its political salience and the extent of its consequences, the crisis of the Economic and Monetary Union (EMU) has exposed such fundamental disagreements between and within its member states, which numerous plaintiffs have brought before domestic courts and the Court of Justice of the European Union (CJEU). This article analyses this judicialisation of the EMU crisis. Using a database on lawsuits introduced in all 28 member states with regard to crisis measures and the new EMU governance mechanisms introduced since 2010, the authors study which actors use the courts and under which circumstances. Based on a combination of judicialisation and political economy approaches, the article develops a series of assumptions on actors’ motivations in order to understand the reasons for judicialisation in debtor and creditor countries.     

When private governance impedes multilateralism: The case of international pesticide governance

Private standards play an increasingly important governance role, yet their effects on state-led policymaking remain understudied. We examine how the operation of private agricultural standards influences multilateral pesticide governance with a particular focus on the listing of substances under the Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade, a treaty-based information-sharing mechanism that allows countries to refuse hazardous chemical imports. We find that private agricultural standard-setting bodies use the Rotterdam Convention's pesticide list to develop their own lists of banned substances. This alters the Rotterdam Convention's intended role, impeding efforts to add substances to the treaty, as attempts by private actors to impose stricter governance than state actors can undermine the potential for international state-based governance to become more stringent. We characterize this as a “confounding interaction” whereby institutional linkages between actions by public and private actors with broadly aligned goals results in unexpected negative consequences for governance.     

Contested Engagements: Youth and the Politics of Citizenship

In this paper, a framework is presented for exploring how youth perform their citizenship through political engagements. The framework provides a way to explore the agency of youthful citizens as imagined by different agents and the ways that youth understand their performances as citizenship. Using interviews with university students and administrators at six universities in Manchester and Glasgow, a distinction is highlighted between agency and the performance of political acts in the production of citizenship, and the implications of this distinction for the development of autonomous citizens.     

Maximizing shareholder value: a new ideology for corporate governance

The decade-long boom in the US stock market and the more recent boom in the US economy have fostered widespread belief in the economic benefits of the maximization of shareholder value as a principle of corporate governance. In this paper, we provide an historical analysis of the rise of shareholder value as a principle of corporate governance in the United States, tracing the transformation of US corporate strategy from an orientation towards retention of corporate earnings and reinvestment in corporate growth through the 1970s to one of downsizing of corporate labour forces and distribution of corporate earnings to shareholders over the past two decades. We then consider the recent performance of the US economy, and raise questions about the relation between the maximization of shareholder value and the sustainability of economic prosperity.     

Germany and the Eurozone Crisis: Between Hegemony and Domestic Politics

This paper explores Germany’s centrality to the outcome of the eurozone crisis. It argues that the eurozone crisis has led Germany’s ordo-liberal principles to trump its other longstanding commitment – i.e. to European integration. These two principles are explored in order then to shed light on how they have played out during the crisis. German centrality has created high expectations for it to provide leadership. Exploring hegemony conceptually and in practice, it is argued that international legitimacy and increasing domestic constraints have limited a leadership role. Indeed, it is argued that it is the domestic political situation that explains why ordo-liberalism has trumped pro-Europeanism. Ordo-liberal emphasis on stability culture has provided a valuable strategic resource for securing German objectives within the eurozone while satisfying the requirements of domestic politics.