N° 42, 2013/4 – European Economic Policies and the Great Recession

PE42

edited by Martial Foucault, 2013/4 (n°42)

 

Special Report

 

Martial Foucault – European Economic Policies and the Great Recession

 

Clément Fontan – Frankenstein in Europe. The Impact of the European Central Bank on Managing the Euro Zone Crisis

Since its creation in 1999, the European Central Bank has been trying to influence the rules of eurozone economic governance, even though its official responsibilities are strictly restricted to monetary issues. In this context, the 2009 sovereign debt crisis has been a window of opportunity for the ECB to exert unprecedented influence on these issues. The main aim of this paper is to analyze how the ECB managed to extend its influence beyond its official monetary responsibilities during the crisis. Following the assumption that the ECB is a political player, it explores three channels through which it had an impact on eurozone economic governance: its monopoly on liquidity, recognition of its expertise on financial issues, and its moral authority in the eyes of Member States. The main findings are the unexpected lack of control of political representatives over ECB politics during the crisis and the central role of policy makers misperceptions of the ECB during the crisis-solving process.

 

Mehdi Arrignon – Policy Endurance Despite the Crisis: Why the Context Changed but Employment Policies Did Not. A Change in Context and Continuity of European Employment Policies

Active social policies try to make work pay better than welfare. Such policies have been experimented upon in Europe since 1997. In the first half of the 2000s, they failed to accelerate a return to work, while results were even worse during the last crisis. How can we explain the persistence of such ineffective strategies? In an analysis of European institutions in three EU Member States, we argue that institutional, cognitive, and political factors can explain the inertia of public policies in periods of crisis.

 

Catherine Spieser – The End of the “Flexicurity” Model and the Resilience of National Models: Labor Unions, Collective Bargaining, and Employment in Germany, France, and Italy. Unions and Employment Negotiations in Germany, France, and Italy

Since the 1990s, under the influence of the Organization for Economic Cooperation and Development (OECD) and of strategies developed at EU level, the notion of “flexicurity has become the dominant paradigm for labor market policies. However, the crisis has led to a questioning of the appropriateness of this policy paradigm in times of economic recession. Since 2008, social partners and policy makers have faced a new agenda of fighting the employment crisis all across Europe. This comparative study of negotiated policies in Germany, France, and Italy shows the limited scope of Europeanization and the resilience of national models in this domain. We examine the stances of labor unions and employers organizations, their practice of social dialogue and collective bargaining, and the use of relevant policy instruments. We outline three paths toward the reconfiguration of industrial relations in the face of the crisis and provide evidence for three ways in which domestic actors can adapt the idea of “flexicurity to the context of the crisis.

 

Laurie Beaudonnet – Preferences for European Social Policy in Times of Crisis

Since 1992, the setting up of Economic and Monetary Union (EMU) has raised citizens awareness of the economic and social implications of European integration. The current economic crisis increased financial pressures on redistribution policies, strengthening the public’s concerns about the potential consequences for the level of social protection and labor market (de-)regulation. However, we know little about preferences for redistribution and social policies at the supranational level despite the importance of such preferences for political support in multilevel systems. This paper first assesses the attitudinal and economic determinants of preferences for a European social policy over time and then the impact of the recent economic turmoil on these preferences. It investigates the empirical validity of the logic for an exit mechanism. It relies on a time-series cross-section analysis of public opinion in the European Union’s 27 Member States from 1996 to 2011 using Eurobarometer and Eurostat data.

 

George Ross – Institutional Knots and EU Economic Governance. Intergovernmental Decision-Making in the Great Recession and the Eurozone Crisis

The EU has always made decisions by a complex mix of “community method and intergovernmentalism. It is arguable, however, that there has been a substantial shift toward intergovernmentalism since Maastricht started to expand the EU’s involvement in national lives. EU decisions in the Great Recession and the Eurozone crisis have been made predominantly by intergovernmental methods, but in two very different ways. Immediately after Lehman Brothers there was a moment of “coordinated intergovernmentalism, when EU members together agreed on broad internationally defined goals about bailouts, stimulus plans, and financial sector reforms, after which each then pursued these goals in the specific ways that its national government deemed appropriate. The Eurozone crisis has been different, however. It has involved “cooperative intergovernmentalism in which Eurozone and EU members have had to make new decisions through multilateral bargaining that then were on each and all. “Cooperative intergovernmentalist processes have contributed to slow decision-making and, sometimes, faulty decisions, in which the preferences of more powerful member states were imposed on others. The results, at least in the short term, have been harmful to the EU’s legitimacy.

 

Comparative Reading

 

Gwenaëlle Perrier – How the European Union Operates: An Introduction to the European Union

 

Critical Readings

 

Christophe Majastre – Claudia Schrag-Sternberg, The Struggle for EU Legitimacy. Public Contestation, 1950-2005

Léa Lemaire, Stefan Waizer – Eurocracy: A Political Sociology of EU Staff