Sovereignty and subordination: on the limits of EU economic policy coordination

Abstract:

Successive European Monetary Union (EMU) roadmaps have presented the expansion of EU controls over Member States’ economic policies as an integral part of monetary union, vital to its survival. Possible alternatives have hardly been discussed.

In this contribution, we trace the evolution of the EU economic policy co-ordination framework from a relatively narrow, rules-based exercise into a largely discretionary process that reaches even the most politically salient areas of the Member States’ economic policies. We then discuss how the extensive coercive powers that the EU formally possesses have turned out to be difficult to use in practice. This reflects the fundamental limits of the EU’s legitimate use of power over its Member States, set by its current level of political and cultural integration. To have a chance of success, further designs of EMU need to respect these limits.