Suchergebnisse

The euro crisis brought back a widening gap in prosperity between the eurozone's core and periphery members, but also revealed a divergence in the strength of its national democracies. This article examines the amplified tension between progressively uprooted national markets governed by a supranational technocracy and nationally organized democratic politics in the eurozone's periphery. Building on Dani Rodrik's globalization 'trilemma', this article explains the weakening of national democratic institutions in Greece, Ireland, Portugal, Spain and Italy since 2008. While the periphery states were forced to choose monetary integration at the expense of both democracy and sovereignty, this trade-off was mostly absent in the core. The eurozone's policy solutions to the crisis did not allow for any democratic input, were implemented through opaque and often-undemocratic throughput processes, and resulted in deteriorating output. The article concludes that the EU crisis response made euro membership in the periphery less compatible with national democratic principles.

This article offers an institutional explanation for the conflicting trends in income inequality both across the Eurozone and within its member states. It argues that the euro's introduction created different economic policy incentives for peripheral and core members. First, the euro's design was a political choice skewed toward deflationary adjustment policies in hard times, leading to falling incomes and employment in the periphery. Second, the institutional incentives of the Eurozone are the opposite for export-driven coordinated market economies and demand-led mixed market economies during booms and downturns, respectively. During the euro crisis, the Eurozone's Northern countries gained at the expense of the Southern ones, while at the same time seeing lower domestic inequality compared to increased inequality in the periphery. This diverging pattern of European inequality was exacerbated by EU economic policy drift, the lack of any real national democratic choice in the periphery, and the growing importance of organized financial interests in Brussels.

Germany has acted as enforcer, facilitator and benefactor in Europe's triple crisis, but not always coherently. (Survival / SWP)

Through a renegotiation of its own fundamental membership terms, Britain wants to reform Europe from within—but by staying out of the euro it refuses to be at the core of European policy making.