Browsing by study line "Global Political Economy"

This thesis evaluates the utility of Stephen Gill’s concept of new constitutionalism in understanding the functioning of the European Economic and Monetary union (EMU) in 2015– 2020. New constitutionalism is defined as legally locked in rules-based market discipline. The thesis has two research questions: 1) To what extent does the concept of new constitutionalism aptly describe the economic policy space of EMU member states? That is, to what extent the EMU, with its associated rules and criteria, constrains the economic policies of its member states? 2) To what extent are new constitutionalist principles “locked in” in the EMU? That is, to what extent is new constitutionalism really constitutional in the EMU? Chapter 1 outlines Gill’s contributions on new constitutionalism in the EMU, defines the key terms and introduces the research problematic. Chapter 2 evaluates the effects of EMU membership on economic policy space. This chapter draws extensively on data on fiscal deficits and levels of public debt well as the fiscal stimulus packages implemented in the context of the corona pandemic in EMU states and other advanced economies. It is shown that although average levels of debt have been lower in EMU states than in advanced economies overall, none of the major member states have remained within the required limits for public debt in this period. This renders the applicability of the concept of new constitutionalism dubious. Similarly, although EMU states stimulated their economies less than other advanced economies in response to the corona pandemic, this was not due to pressure from EU institutions as Gill’s argument would suggest. Chapter 3 addresses the political contingency in the application of rules-based market discipline in the EMU. Most notably, beyond the extreme case of Greece in 2015, there has been a reluctance by the European Commission to discipline member states for breaking the fiscal rules. The last two sections of this chapter consider the extent to which the actions of the European Central Bank have undermined market discipline in the EMU, and the pertinent question of whether the corona pandemic has ushered in a fundamental change in economic thinking in the EU. Drawing on this analysis, it is argued that the concept of new constitutionalism most aptly described the situation faced by Greece in 2015, but its applicability has subsequently waned. Specifically, the concept of new constitutionalism fails to capture the political contingency and flexibility in the application of both fiscal rules and market discipline in the EMU. Chapter 4 is dedicated to the second research question – that is, to what extent new constitutionalist principles are constitutionalised in the EMU. This chapter analyses the practical possibilities for EMU reform. However, given the unanimity requirement between member states for fundamental reform of the EMU, it is here that Gill’s argument about new constitutionalism being “locked in” is found to have the most applicability. The overall argument of this thesis is that the original Maastricht vision of the EMU has not come to fruition. In fact, the EMU experience illustrates that attempts to impose fixed visions of order onto social systems tend to produce disorder. While the eurozone crisis itself was generated by unbalancing tendencies inherent in the EMU, it has subsequently survived only through circumvention of its rules.