Europe in Hard Times: Institutional Reconfiguration in the European Union since the 2008 Great Recession
The 2008 Great Recession was the trigger for the first real stress test of the European Monetary Union. The eurozone and the European Union were faced with a succession of three crises: financial, banking, and sovereign debt. Faced with the real possibility of the exit of multiple members, or the complete implosion of the common currency; members-states undertook the biggest economic institutional change since the Treaty of Maastricht. Briefly: in spite of the negative media, political and academic coverage, how can we explain that the EU responses to the euro area and to the banking and sovereign debt crisis were not only to keep the union intact, but to reinforce and expand the Europeanization process? To make sense of the institutional outcomes of the crisis, I borrow from the approach of Peter Gourevitch in his classic Politics in Hard Times. Hard times are a catalyst for institutional change. During a crisis, the various actors enter a period of flux where the existing coalitions are subject to a realignment. The actors involved have a range of policy choices to come to terms with the crisis. These options are shaped by the institutional legacy, and by the specifics of the coalition realignment. When the crisis is resolved or when the crisis fades out, the new coalitions crystallize and they remain in place during easier times. While Gourevitch applied his framework to societal groups within a state, I bring my analysis to the second level and I look at coalitions of member-states within the European Union. In this dissertation, I argue that the international economic context of the crisis created a period of flux where existing coalitions of member-states in Europe broke down. During the crisis, new coalitions emerged along the debtor-creditor axis. The range of policy options are arranged along a security-solidarity axis. Coalitions had to enter into negotiations and the results of these negotiations are the EFSF, ESM, Six-Pack and Two-Pack, and the banking union. Between the five of them, they are the solutions to the problems created by the financial, banking, and sovereign debt crises.