The British Labour Party and monetary union

The real test of the British Labour Party's new orientation to Europe will be its policy on economic and monetary union (EMU). This article analyses Labours political economy in relation to European integration and to the management of the currency, and how the intersection of these two have produced four distinctive approaches to EMU within the party. It assesses the stance of new Labour towards EMU in the context of this internal Labour Party debate as well as in the wider context of European social democracy.     

The Franco‐German relationship and economic and monetary union: Using Europe to ‘Bind Leviathan’

This article explores the interaction between the institutional, strategic and cognitive dimensions of the Franco‐German relationship on Economic and Monetary Union (EMU). It begins by spelling out its institutional setting and its context of structural power. These sections highlight the main informal rules that have shaped the relationship and help explain the choice of negotiating strategies to reconcile their objectives and secure influence on the design and content of EMU. The next section focuses on the cognitive dimension of the relationship, identifying the nature of Franco‐German objectives, their basis in differences of inherited beliefs and problems in reconciling them. In the final section the nature of the political theory underpinning EMU is clarified and explained and the kind of challenge that it poses for French policy makers as it tests the limits of the republican state tradition. More broadly, EMU is an attempt to redefine the relationship between state and Europe and state and society, bringing with it new political meanings.     

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.     

Believing in national exceptionalism: ideas and economic divergence in Southern Europe

Economic adjustment in Spain, Portugal and Greece prior to the EMU nominal convergence programme is examined in an effort to explain divergence from policy orthodoxy. A notion of national exceptionalism is proposed as an ideational framework through which government policy makers perceive their country's position in the European and global sphere. Three levels of national exceptionalism are distinguished, in ascending order of explanatory importance: a level at which national exceptionalism is rooted in cultural predispositions; a level at which it appears to be empirically and logically plausible; and a level at which it offers a politically beneficial ideological strategy. When all three levels concur, national exceptionalism carries notable ancillary explanatory power. That is the case with post-authoritarian Greece through the 1980s, but not with Spain or Portugal.     

Trade unions for EMU: Sectoral preferences and political opportunities

Surveys conducted on the political economy of Europe's Economic and Monetary Union have seldom considered the response of domestic interest groups, notably trade unions. This article contrasts and explains the positions on EMU adopted by major British, French and German trade unions, in the process reassessing the so‐called interest group approach to preference formulation. It is argued that while the impact of sectoral orientation appears significant, it is mitigated by the intervention of ideological and institutional factors. On a substantive level, unions turned out to be broadly supportive of what many had labelled a ‘monetarist’ project. If as is often argued, social and political cohesion is needed for monetary union to endure, this represents an important development.     

Economic and Monetary Union: Pillar of a Federal Polity

The Masastricht Treaty commitment to the economic and monetaryunion (Emu) follows a lengthy process of building up monetaryintegration, starting with the European Monetary System (1979),then, in the 1980s, the free movement of capital and integrationof financial markets. Emu, representing the final stage of thisprocess, is seen by most federalists as a pillar in the structureof the European Union, contributing to its development by stagesinto a federal polity. With the economic and monetary union,the European Union's economic and environmental powers are becomingcomparable to those of some federations, and with institutionsthat have over time acquired substantial federal elements, furtherreforms may well make the European Union into a federal system.This article identifies the forces, interests, and methods involvedin an incremental process that may be called a new federalism.     

Seigniorage,Delegation and Common Currency: Why Monetary Unions May Fail?

We provide a parable that can explain why monetary unions havehistorically been dissolved following political separation.Using a simple model of government finance in a commoncurrency area, it is shown that delegation to an``inflationary'' central banker is an optimal policy whencountries struggle for seigniorage revenues, whether delegatescoordinate monetary policy or not. Furthermore, a commoncentral bank, in which representatives coordinate monetarypolicy, will reach an outcome that is Pareto-inferior to thatproduced by a non-cooperative seigniorage war. Accordingly,without political dialogue regarding the designation of therepresentatives, a monetary union can fail.     

National Parliaments and the Eurozone Crisis: Taking Ownership in Difficult Times?

The eurozone crisis suggests a significant reinforcement of executive dominance in EU policy-making. Opaque emergency decisions taken at European summits as well as treaties established outside of the EU legal framework facilitate the side-lining of democratically elected chambers. This development entails the risk of a new wave of de-parliamentarisation in EU policy-making. An effective scrutiny of crisis management by national parliaments is, however, indispensable for taking national ownership of the reforms in the Economic and Monetary Union (EMU). This paper investigates national parliaments’ involvement in the development of instruments to combat the crisis. Based on a quantitative dataset of crisis-related parliamentary activities in 2010–2012, the article observes a very uneven engagement in the scrutiny of crisis management. Institutional prerogatives in EU affairs as well as macro-economic factors can partly explain the observed variation. Surprisingly, however, crisis-related parliamentary activity is not a reaction to Eurosceptic attitudes either in parliament or among the public.     

British Trade Unions and European Union Integration in the 1990s: Politics versus Political Economy

This article evaluates the changing assessments within the British trade union movement of the efficacy of European Union integration from the viewpoint of labour interests. It argues that there has been a marked further 'Europeanisation' of British trade unionism during the 1990s, consolidating an on-going process which previous research shows began in earnest in the mid 1980s. A shift in trade union economic policy assessments has seen the decisive abandonment of the previously dominant 'naive' or national Keynesianism. While there remain important differences in economic perspective between unions, these are not such as would create significant divisions over the question of European integration per se , the net benefits of which are now generally, though perhaps not universally, accepted. The absence of fundamental divisions is evident from a careful assessment of the debates about economic and monetary union at TUC Congress. The Europeanisation of British trade unionism needs to be seen within the context of an emergent regionalism, in Europe and elsewhere. It can best be understood as a rational response by an important corporate actor (albeit one whose national influence has been considerably diminished in recent decades) to globalisation and a significantly changing political economy environment.     

Union participation in economic policy making in France,Italy, Germany and Britain, 1970–1993

This study uses a specially‐developed measure of union participation in economic policy making to classify and compare the historical experiences of France, Italy, the Federal Republic of Germany and Britain between 1970 and 1993 in order to present a clearer view of the variability of union participation in economic policy making in these countries over this period than has been available up to now. It is found that union participation was concentrated in certain areas of economic policy, in particular labour market policy, and that even high levels of participation were not necessarily linked to union agreement on wage restraint. Over the period as a whole, participation was highest in Italy and lowest in Britain and France, but varied considerably over time as well as between countries. These variations were clearly linked to whether the Left was included in the government of the day as well as to the nature of the national union movements.     

Unionization and Work Attitudes: How Union Commitment Influences Public Sector Job Satisfaction

This article explores whether union commitment dampens public sector job satisfaction. By examining the connection between union commitment and two workplace attributes that are presumed to be more prevalent in public sector workplaces—perceptions of higher red tape and greater public service motivation—this article develops three hypotheses exploring the direct and indirect relationships between union commitment and public sector job satisfaction. The findings from a series of structural equation models indicate that union commitment directly increases members’ job satisfaction, but it more prominently increases members’ job satisfaction indirectly by reducing perceived red tape and enhancing public service motivation.     

Elite Collusion and Public Defiance: Sweden's Euro Referendum in 2003

In a referendum held on Sunday, 14 September 2003, the Swedish electorate rejected membership of the third stage of the Economic and Monetary Union (EMU). After a campaign characterised as heated by Swedish standards, and the murder of Foreign Minister Anna Lindh, the referendum delivered a clear ‘No’ majority. In this article, it is argued that while the 2003 EMU referendum may not have compromised the use of referendums as an occasional complement to representative democracy, it did indicate a substantial gap between citizens and the political elite.     

Political Cycles,Fiscal Deficits,and Output Spillovers in Europe

This paper investigates whether national elections in Europegenerate political cycles in other European countries, and, ifso, whether these spillover effects are likely to surviveinside EMU. The paper first tests whether elections in Germanyaffect macroeconomic outcomes in other European countries andthen investigates the impact of elections on budget deficits.The results indicate that German politics significantlyimpacts macroeconomic variables in other European countries,and also that politics significantly affects the behaviour ofEuropean budgetary policy. The prospect of elections tends toincrease public deficits in recessions, whereas left-winggovernments tend to be more deficit-prone than right-winggovernments regardless of the state of the economy. Moreover,the existence of political cycles spillovers among Europeancountries suggest that there may be a need for electoralcoordination.     

Monetary Sovereignty: Nature,Implementation, and Implications

Monetary sovereignty is a central concept of Modern Money Theory (MMT). The paper explores the characteristics of monetary sovereignty, the means used to implement it, and some of its theoretical and policy implications. Herein, it is shown that monetary sovereignty involves a high degree of coordination between the central bank and the national treasury. The paper also argues that monetary sovereignty is not special to the United States, does not require direct monetary financing of the treasury, does not tell us anything about the optimal size of the fiscal balance, and is not dependent on the willingness of foreigners to hold the domestic currency.     

The Federal State and the Breakup of Czechoslovakia: An Institutional Analysis

This article examines the breakup of Czechoslovakia from aninstitutionalist perspective. The federal state adopted afterWorld War I failed to accommodate tensions in society and heightenedethnic conflict. After World War II, an "asymmetrical" federationwas created that, while designed to provide a degree of homerule to Slovakia, further alienated Slovaksfrom national politics.Each effort to reform the federal order unintentionally promptednew concerns over the balance of political power. The inabilityto construct an enduring federal state helps explain why thetransition from communism proved fatal for the union that wasCzechoslovakia.     

National Identity or National Interest? Scottish,English and Welsh Attitudes to the Constitutional Debate

This article analyses political attitudes to the union in England, Scotland and Wales after the Scottish independence referendum. Using public opinion data, we explore constitutional preferences and perceptions of national grievance, before examining the role that national identity plays in structuring preferences. Our evidence shows that considerable demand exists for nationally demarcated forms of government within the UK, although these constitutional preferences do not translate in support for policy diversity across the UK. We also find evidence that these constitutional preferences relate closely to national identity, but relate also to appeals to national interest.     

Structural stress or deliberate decision? Government partisanship and the disempowerment of unions in Denmark

The role of government partisanship in the era of retrenchment is debated. It is argued in this article that partisanship matters for only some aspects of policy. Irrespective of ideological bending, governments accommodate structural pressure as well as short‐term electoral interests to keep the economy on track and implement austerity measures in labour market policy that, in effect, reduce union resources and capacity to mobilise. But only governments of the right exploit structural stress to pursue long‐term interest in curbing the institutional privileges of unions. Aligning short‐ and long‐term interests is easier for social democratic governments during economic expansion, whereas governments of the right have an easier time aligning interests in periods of structural pressure. By analysing a sample of Danish labour market reforms, this article shows that today social democratic governments still defend the institutional privileges of unions and discusses the comparative significance of the Danish case.     

Feminism and bureaucratic discourse∗

Abstract

The globalization of markets is calling national employment and social legislation increasingly into question, so that not only the international trade union organizations but also the Clinton Administration are calling for workers’ rights to be embodied in trade agreements. This paper deals with both the fundamental question of whether international labor standards serve a useful purpose and the more specific question of whether trade agreements are a suitable way of enforcing minimum standards. It will argue that international standards can plausibly be justified in terms of development theory. Core labor rights, furthermore, enjoy universal acceptance. A social clause can help in enforcing these rights. The procedures for negotiating social clauses and for implementing them as proposed by the international trade union movement do not lend themselves to protectionism.     

Renegotiating Soviet Federalism: Glasnost and Regional Autonomy

The current expansion of free political association under glasnost'has focused the political energies of mobilized national movementson demands for republican autonomy. Reform-minded elements inthe Gorbachev leadership have encouraged these movements, seeingthem as counterweights to central governmental bureaucracy.Aspirations for national statehood have reached fullest expressionin the Baltic republics, where the republican parliaments haveexpressed overwhelming support for economic and cultural sovereignty,but such sentiments are voiced by national intelligentsias ineach republic. Moscow has adopted a program of republican decentralizationas a solution to the growing problem of the federal budget deficit,but the implications of republican economic autonomy for thecohesiveness of the federal union are fundamental and far-reaching.     

Fiscal institutions, fiscal policy and sovereign risk premia in EMU

We investigate the effect of fiscal institutions such as the strength of the finance minister in the budget process and deficits on interest rate spreads of Eurozone countries. Deficits significantly increase risk premia measured by relative swap spreads. The effect of deficits is significantly lower under EMU. This effect partly results from neglecting the role of fiscal institutions. After controlling for institutional changes, fiscal policy remains a significant determinant of risk premia in EMU. Better institutions are connected with lower risk premia. Furthermore deficits matter less for risk premia in countries with better institutions. Markets acknowledge that better institutions reduce fiscal difficulties rendering the monitoring of annual developments less important.