The (Ever) Incomplete Story of Economic and Monetary Union

The JCER is an open-access journal published by the University Association for Contemporary European Studies (UACES) in association with the UACES Student Forum.

The JCER invites submissions from scholars who are experts in any subject area delivering analysis that relates to Europe. This includes, but is not limited to, Politics/International Relations, Area Studies, European Integration, Economics, Law, History, Culture and Learning & Teaching. The journal publishes the work of established academics alongside that of PhD students and early career researchers.Abstract:

This article applies the governance typology used in this special issue to the evolution of euro area governance. The article begins with a description of Economic and Monetary Union’s original governance structure, with third order governance (shared norms) present in varying degrees in monetary, financial and fiscal governance.

While a shared consensus on the importance of an independent central bank to pursue price stability allowed for the creation of the European Central Bank, euro area governance was otherwise limited to the coordination of national policies. Since the crisis, shifting norms (third order governance) allowed for the creation of new bodies (e.g. the European Stability Mechanism and the Single Supervisory Mechanism) and the expansion of the powers of existing institutions (particularly the ECB).

In areas where no normative changes occurred (fiscal and economic policy coordination), second order governance has been marked by incremental changes to existing institutions. The degree to which economic governance has become more hierarchical depends both on the strength of third order governance norms and the preferences of large states like Germany either to retain their own sovereignty or create additional rules that bind member states.

This article forms part of a special issue Sixty-Five Years of European Governance.