Rethinking the Union of Europe Post-Crisis: Has Integration Gone Too Far?

379 Pages·2014·2.954 MB·English

by  Giandomenico Majone

RETHINKING THE UNION OF EUROPE
POST-CRISIS
Inthisimportantnewbook,GiandomenicoMajoneexaminesthecrucial
but often overlooked distinction between the general aim of European
integrationandthespecificmethodofintegrationemployedindesigning
a(ill-considered)monetaryunion.Writtenwiththeauthor’scustomary
insight andprecision,thishighlytopicalandprovocativebookreviews
theUnionleaders’traditionofpushingthroughambitiousprojectswith-
outconsideringtheserioushurdlesthatlieinthewayof theirsuccess.
RegionalandEuropeanintegrationtopicsarediscussed,includingcred-
ibilityofcommitments,delegationofpowers,bargainingandinfluence
activities, adverse selection and moral hazard. The author also offers a
deeperexaminationof thespecificcrisisofmonetaryintegration,arguing
thatintegrationmightbeachievedmoreeffectivelywithinter-jurisdictional
competition, and suggests how integration should be managed in the
globalizedworld.
giandomenico majone isEmeritusProfessorofPublicPolicyatthe
EuropeanUniversityInstituteinFlorence.

RETHINKING THE UNION OF
EUROPE POST-CRISIS
Has Integration Gone Too Far?
GIANDOMENICO MAJONE
UniversityPrintingHouse,CambridgeCB28BS,UnitedKingdom
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Informationonthistitle:www.cambridge.org/9781107694798
©GiandomenicoMajone2014
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Firstpublished2014
PrintedintheUnitedKingdombyClays,StIvesplc
AcataloguerecordforthispublicationisavailablefromtheBritishLibrary
LibraryofCongressCataloguinginPublicationdata
Majone,Giandomenico.
RethinkingtheunionofEuropepost-crisis:hasintegrationgonetoo
far?/GiandomenicoMajone.
pages cm
ISBN978-1-107-06305-1(hardback)
1. EuropeanUnioncountries–Economicintegration. 2. EuropeanUnioncountries–
Economicintegration–Politicalaspects. 3. EuropeanUnioncountries–Economic
policy. 4. EuropeanUnioncountries–Politicsandgovernment–
21stcentury. I. Title.
HC241.M256 2014
337.1042–dc23
2013046218
ISBN978-1-107-06305-1Hardback
ISBN978-1-107-69479-8Paperback
CambridgeUniversityPresshasnoresponsibilityforthepersistenceoraccuracyof
URLsforexternalorthird-partyinternetwebsitesreferredtointhispublication,
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CONTENTS
ListofAbbreviations pagevi
Introduction:varietiesofregionalintegration 1
1 Monetaryunionasametaphor 20
2 Apoliticalcultureoftotaloptimism:itsriseandfall 58
3 Integrationanditsmodes 88
4 Deepeningintegration:transactioncosts
andsocio-politicallimits 118
5 Europeanintegrationandthedecouplingofpolitics
andeconomics 149
6 Fromthedemocraticdeficittoademocraticdefault?
Thenormativedimensionoftheeurocrisis 179
7 ‘MoreEurope’ 208
8 ThelimitsofleaderlessEurope 236
9 Integrationthroughcooperativecompetition 266
10 Thenationstatebetweenglobalizationandregional
integration 295
Bibliography 323
Index 337
v
ABBREVIATIONS
ACP African,Caribbean,andPacific(countries)
ANZCERTA Australia–NewZealandCloserEconomicRelationsTrade
Agreement
BRIC Brazil,Russia,India,China
BVG Bundesverfassunsgericht
CAP CommonAgriculturalPolicy
CFSP CommonForeignandSecurityPolicy
CJEU CourtofJusticeoftheEuropeanUnion
Coreper CommitteeofPermanentRepresentativesofthenational
governments
CUSTA Canada–UnitedStatesFreeTradeAgreement
DSB Dispute-settlementbodies
DSM Dispute-settlementmechanisms
DSU DisputeSettlementUnderstanding
EC EuropeanCommunity
ECB EuropeanCentralBank
ECHR EuropeanConventionfortheProtectionofHumanRightsand
FundamentalFreedoms
ECJ EuropeanCourtofJustice
ECOFIN CouncilofthefinanceministersoftheEU
ECSC EuropeanCoalandSteelCommunity
ECU EuropeanCurrencyUnit
EEC EuropeanEconomicCommunity
EFTA EuropeanFreeTradeArea
EMS EuropeanMonetarySystem
EMU EconomicandMonetaryUnion
EP EuropeanParliament
EPU EuropeanPoliticalUnion
ERM ExchangeRateMechanism
ESCB EuropeanSystemofCentralBanks
ESM EuropeanStabilityMechanism
EU EuropeanUnion
EURATOM EuropeanAtomicEnergyCommunity
GATT GeneralAgreementonTariffsandTrade
vi
abbreviations vii
GDP grossdomesticproduct
GSP GrowthandStabilityPact
IMF InternationalMonetaryFund
ITF InternationalTransportWorkersFederation
JHA JusticeandHomeAffairs
MEP MemberoftheEuropeanParliament
MERCOSUR MercadoComùndelSur
MTBO Medium-termbudgetaryobjective
NAFTA NorthAmericanFreeTradeAgreement
NATO NorthAtlanticTreatyOrganization
OECD OrganizationforEconomicCooperationandDevelopment
OMC OpenMethodofCoordination
PP PrecautionaryPrinciple
SGP StabilityandGrowthPact
SPS SanitaryandPhytosanitary(Agreement)
StabilityTreaty TreatyonStability,CoordinationandGovernanceinthe
EconomicandMonetaryUnion2012
TCE Transaction-costeconomics
TCP Transaction-costpolitics
TEU TreatyontheEuropeanUnion
TFEU TreatyontheFunctioningoftheEuropeanUnion
WTO WorldTradeOrganization

u
Introduction: varieties of regional integration
Regionalism,oldandnew
The revivalofregionalintegrationin the 1980s–which JagdishBhagwati
(1993) labelled the ‘Second Regionalism’, in contrast to the ‘First
Regionalism’ of the 1960s – raises a number of issues, starting with the
questionwhythefirstregionalismfailed(withthenotableexceptionofthe
European Economic Community (EEC)), while this time regionalism is
likelytoendure.TheconversionoftheUnitedStates(US)toregionalismis
ofmajorsignificanceinthisrespect.Asthekeyadvocateofmultilateralism
through the post-war years, its decision to travel the regional integration
routeseemstohavetiltedthebalanceatthemarginfrommultilateralismto
regionalism. A second important factor has been the widening and deep-
ening of the European Community/Union (EC/EU). Thus, the fear that
European investments would be diverted to Eastern Europe was cited by
President Salinasof Mexicoasafactor decisivelypushinghimtowardthe
NorthAmericanFreeTradeAgreement(NAFTA).Hefeltthatafreetrade
area embracing all of North America would enable Mexico to get the
investments needed from the US and Canada, as well as from Japan
(Bhagwati1993;VegaCànovas2010).InhiscommentonBhagwati’sarticle,
Robert Baldwin considered the likelihood of a gradual drift of the North
American regional bloc to include a number of other Latin American
countries. This enlargement would be driven by pressures from these
countries to tap into the US market but another important factor that
might drive the expansion of an American-centred bloc, according to
Baldwin, ‘would be the growing influence of the European Community
in trade, macroeconomic and foreign policy matters. US political and
economicleadersmayadopttheviewthatitisnecessarytoexpandsucha
blocinordertomatchtheincreasingpoliticalandeconomicpowerofthe
Community’(Bhagwati1993:54).
Adistinguishingcharacteristicofthenewregionalismisthemovement
fromshallowintegration–integrationbasedontheremovalofbarriersto
1