Leader of the pack? German monetary dominance in Europe prior to EMU

In this paper, the monetary policy independence of European nations in the years before European Economic and Monetary Union (EMU) is investigated using cointegration techniques. Daily data is used to assess pairwise relationships between individual EMU nations and ‘lead’ nation Germany, to assess the hypothesis that Germany was the dominant European nation prior to EMU. By and large our econometric investigations support this hypothesis, and lead us to conclude that the only European nation to lose monetary policy independence in the light of monetary union was Germany. Our results have important policy implications. Given that the loss of monetary policy independence is generally viewed as the main cost of monetary unification, our findings suggest a reconsideration of the costs and benefits of monetary integration. A country can only lose what it has, and in Europe the countries that joined EMU — spare Germany — apparently did not have much to lose, at least not in terms of monetary independence. Instead, they actually gained monetary policy influence by getting a seat in the ECB's governing council which is responsible for setting interest policy in the euro area.     

European development banks and the political cycle

This paper investigates whether the lending activity of European development banks is affected by opportunistic political behavior, by looking at the change in loans extended by these entities in election years. The empirical analysis leverages on a unique manually collected dataset that includes all the development banks headquartered in Europe, for the period 2002–2015.A comparison with the rest of the European banking system reveals that while the political view of development banks cannot be supported as a general rule, it finds empirical evidence in flawed democracies, where large development banks actually tend to increase their lending activity in election years.     

The End of ‘Central Europe’? The Rise of the Radical Right and the Contestation of Identities in Slovakia and the Visegrad Four

ABSTRACT

The article analyses the effects of the migration crisis and the parallel rise of right wing parties on national and regional identities in Slovakia and the broader subregion of the Visegrad Four. It argues that the recent right wing political discourse around migration has been reshaping the meaning of ‘Central Europe’ as a normative project and an identity shared by the V4 countries. The post-Cold War narrative of Central Europe was a story of ‘returning to the West’, which in practice meant that normative conformity with the West was a precondition of membership in key Western institution. The situation has changed visibly after the migrant crisis, as the V4 political elites have now been constructing new identities, in partial juxtaposition with Western European liberalism. These new identities favour a culturalist, conservative interpretation of the nation and reject humanitarian universalism, epitomized by the European Union’s decision to welcome the refugees. This arguably devaluates the previous notion of ‘Central Europe’ as a region that seeks to identify itself firmly with the West. Slovakia is chosen as a case study because of the recent success of the radical right in the 2016 parliamentary elections. The article concludes that although the situation of being structurally locked into the EU does not allow the V4 countries to openly challenge its main principles, the V4 political elites pursue a counter-hegemonic strategy, subverting and resignifying some of its key political notions. One should, therefore, speak not of an end of ‘Central Europe’ but rather of its evolution into a new, hybrid stage, where normative conformity and identification with the West will only be partial. The article makes use of Laclau and Mouffe’s theory of discourse and related concepts as well as insights from constructivist geopolitics literature to track articulatory practices of the regional establishments. The study relies on evidence from recent political campaigning in Slovakia as well as official Visegrad Group documents from 2015 to 2016.     

Vibert's European union: A United Nations or a United States?

In his book, Europe: A Constitution for the Millennium, Frank Vibert explores every major issue that will arise in the design of a constitution for a European political union. Can the theoretical constructs of constitutional economics be used to aid in the practical design of a European constitution? This is what Vibert attempts to do in his book. This review contains a more detailed discussion and analysis of a few of Vibert's main theses. In particular, it focuses, on several key issues that will be the major determinants of whether the European Union will achieve lasting success.     

Hungarian Border Politics as an Anti-Politics of the European Union

ABSTRACT

This essay contextualises Hungarian antipolitics of Europe as an element of radical conservative nation-building and as a reflection of the strategic use of borders. Two concrete examples of border politics will be elaborated that document shifts from EU-conformity to EU-contestation and the increasing political significance of culturalist arguments. These cases, moreover, are exemplary of the dual nature of then nationalist-conservative agenda which involves: 1) the implementation of an ethnopolitical and thus extraterritorial, de-bordered notion of nation and 2) the unilateral securitisation of Hungary’s borders, for example with Serbia, in a self-proclaimed defence of European integrity. The research that informs this essay is based on a review of media sources, academic and policy-focused literature. The essay begins with a discussion of links between Hungarian euroscepticism and the radical conservative nation-building project and continues with an analysis of post-1989 border politics with regards to the areas mentioned above. Considerable attention will be devoted to the Hungarian government’s politics of borders and contestations of European Union within the context of the so-called refugee crisis and wider debates regarding immigration and asylum.     

论欧洲货币一体化的不可逆转性——基于退出成本的分析

通过对欧洲货币一体化的历史进程进行分析,发现多数欧元成员国偏向选择固定汇率制度。本文根据合作程度不同对各国汇率制度进行了重新分类,并通过模型的构建,对三种不同合作程度的固定汇率制度的退出成本进行了比较。结果表明：退出成本最高的欧洲单一货币形式的固定汇率制度较为稳健且不易受到“投机”的攻击,因此《欧盟宪法条约》受挫之后部分成员国发出退出欧元区的威胁是不可置信的;欧洲货币一体化进程不可避免,也不可逆转。     

On the mark(s): Optimum currency areas in Germany

In the wake of unification, the former GDR became a member of the DM monetary zone. We evaluate whether unified Germany satisfies the criteria defining an optimal monetary area. We conclude that the primary criterion, similarity of shocks, is not satisfied even by the western states, a reflection of the importance of sector-specific relative to geographic shocks coupled with different sectoral structures. Extending this argument, we conclude that the correlation of shocks to the eastern states with western states is also likely to be small. A case for monetary unification must, in consequence, be based on political rather than narrowly economic calculations.     

How Not to Write a Constitution—The Maastricht/Amsterdam Treaties

The member states of the European Union have negotiated two treaties intended to advance political union—Maastricht in 1992 and Amsterdam in 1997. This article critiques both treaties for their failures on both procedural and institutional questions. It suggests that the costs for member states of reaching a constitutional bargain can be reduced by emphasising decentralised arrangements for Europe and that a constitutional opportunity remains.     

The Political Economy of Policy Vacuums: The European Commission on Demographic Change

ABSTRACT

Supranational organisations can only confront politico-economic issues that are recognised as important. Typically, issues gain recognition either when they provide an external shock to the system, shaking political actors into action, or when they are framed as important in policy networks concerned with developing the appropriate scientific approach. Ideally political and scientific actors align in creating pressures to recognise the issue as salient and to mobilise organisational responses. Issues differ in their capacity to be driven by both political and scientific pressures, creating crisis management, technocratic, and reform agenda outcomes. Here we explore a further variation, where pressures around an issue are insufficient, creating a policy vacuum. We examine one such policy vacuum in Europe: demographic change. This issue belongs to no particular Directorate-General in the European Commission, but is subject to policy frames from DG EMPL and DG ECFIN. Without sufficient political and scientific pressures, no particular policy position is occupied and advocated despite recognition of the issue’s importance. We discuss the role of policy vacuums and the need for their identification in political economy research.     

Vibert's vision: Constitutional theory in search of a constitution

Frank Vibert's book, Europe: A Constitution for the Millennium, draws on constitutional economics to describe how a European constitution should be developed to govern a European political union. Vibert's theoretical constitutional framework is solid, but his analysis has two shortcomings. First, he discusses constitutional theory but never presents any specific constitutional provisions that would be based on that theory. This makes the feasibility of drawing up an acceptable constitution appear more straightforward than it actually is. Second, he assumes that Europe will eventually be politically unified in much the same manner as the United States, and does not consider alternatives. Rather than having a single European government, as Vibert suggests, a better alternative would be to have European nations united through a variety of treaties, agreements, and multinational organizations.     

Interest Rates and Wage Indexation

The growth effects of European economic and monetary intergration and the progress of

regional convergence across Europe depend on whether economic in Europe is consistent with a neoclassical or an endogenous growth model. Using annual data from the 1950-1992 period for each of 20 European economies, the paper finds that steady-state real growth rates are generally unaffected by changes in the investment rate, population growth, and government consumption, evidence consistent with neoclassical growth theories. This Strengthens the likelihood of regional (perhaps conditional) convergence, and suggests that the effects of greater monetary and economic unification will be in terms of higher incomes per capita, but not in terms of permanently higher growth rates.[O40,F43]     

Soviet subsidization of Eastern Europe: The primacy of economics over politics?

The level and distribution of Soviet subsidies to various East European countries, which Marrese and Vaňous attribute in their book Soviet Subsidization of Trade with Eastern Europe: A Soviet Perspective to political considerations, are explained here as, for the most part, the normal outcomes of the economic integration of a bloc with relative resource endowment differing from those obtaining in the rest of the world. The statistical methods used by Marrese and Various to calculate the subsidies are also criticized.     

Europe as social reality

What is “Europe”? There exist European legal rules, emergent from the institutional structure constructed from the treaties negotiated among the separate nation-states over the half-century since World War II. The social reality that is Europe in 1996 remains far removed from the social reality that is the United States, where individuals are directly subject to federal laws as well as those laws promulgated through the separate states. Europe is not yet a federal union or a federalism, but may qualify as a confederation of nation-states. Europe, as observed, does not correspond to the theorists' model for political federalism. It remains open as to whether or not any approximation to this model will ultimately be realized.     

Regulating coexistence in Europe: Beware of the domino-effect!

In the literature spatial coexistence of genetically modified (GM) and non-GM crops is often regarded as a technical challenge, depending on spatial pollen dispersal and cross-pollination, temporal and spatial distribution and interaction of crops, separation distances and practical measures, but the interaction between economic incentives and costs of coexistence is poorly studied. Europe is currently struggling to implement coherent coexistence regulations in all EU Member States. Since the publication of the European Commission's guidelines in 2003, some Member States have developed, and others are still developing, a diversity of ex ante regulations and ex post liability rules on the coexistence of GM and non-GM crops. In this article, our attention is drawn to ex ante regulations. More specifically, we polarize two alternative ways of regulating spatial coexistence, i.e. rigid minimum distance rules, imposed on GM crop production, versus flexible segregation measures such as buffer zones, leaving more freedom of negotiation between neighboring farmers. We conduct simulations with the software ArcView® on a GIS dataset of a hypothetical case of GM herbicide tolerant oilseed rape cultivation in Central France. Our findings show that rigid coexistence rules, such as large distance requirements, may impose a severe burden on GM crop production in Europe. These rules are not proportional to the farmers' basic economic incentives for coexistence and hence not consistent with the objectives of the European Commission. More alarming, we show that in densely planted areas a domino-effect may occur, a theoretical possibility ignored in the literature. This effect raises coexistence costs and even adds to the non-proportionality of rigid coexistence regulations. Instead, we show that flexible measures would be preferable since they are proportional to the economic incentives for coexistence and, hence, less counterproductive for European agriculture.     

Redefining Europe: Russia and the 2015 Refugee Crisis

ABSTRACT

This article uses approaches embedded in practical and popular geopolitics for analysing how Russia capitalizes on the refugee crisis to redefine Europe. Two of Russia’s European policies are at the centre of this analysis: 1) Moscow’s direct appeal to Russian-speaking communities, and 2) the Kremlin’s liaisons with Eurosceptic parties of national conservative background. The main questions these two policies raise are: 1) how Russia benefits from anti-refugee attitudes among European national conservative groups, and 2) how illustrative Russia’s policies are of Moscow’s strategy toward Europe in the context of the refugee crisis. The article argues that, for Russia, these two policies constitute a strategy of re-entry into Europe from which Moscow was increasingly isolated in the aftermath of the annexation of Crimea in 2014. In this context, the authors claim that the refugee crisis has widened room for Russia’s return to the European (geo)political scene through a strategy of redefining Europe in more conservative and traditionalist terms, as opposed to the liberal cosmopolitanism of EU’s project. Using the concepts of trans-ideology and biopolitics, the article claims that Russia’s strategy of re-entry includes narratives of othering today’s Orientalized Europe and salvaging it from liberal tolerance, political correctness and cultural fragmentation.     

Imagining the European Economy: 'Competitiveness' and the Social Construction of 'Europe' as an Economic Space

This article analyses the political and ideological agency of an emergent European transnational capitalist class in the socioeconomic governance of the European Union (EU) by examining the case of the European Round Table of Industrialists (ERT). It seeks to show that the ERT‐as an elite forum mediating the interests and power of the most transnationalise d segments of European capital‐has played a significant role in shaping European governance in as much as it has successfully articulated and promoted ideas and concepts thathave at critical times set the political agenda and, beyond, have helped to shape the discourse within which European policy making is embedded. Here, the increasingly neoliberal orientation of the ERT reflects, and at the same time is a constitutive element within, the construction of a new European order in which governance is geared to serve the interests of a globalising transnational capitalist elite, and hence the exigencies of global 'competitiveness'. Although in recent years some detailed work has been done on the role of the ERT in the internal market programme, there has as yet been little attention paid to (and thus interpretation of) the content of the ideas promoted by the ERT and hence to the ideological power that this forum of transnational capitalists exercises. The article is divided into four main parts. The first briefly elaborates the theoretical framework that informs my analysis. Drawing upon what has come to be labelled the 'neo-Gramscian school' in International Relations (IR), I willadvance a historical materialist understanding of the dynamics of European integration, emphasising in particular the role of transnational social forces‐as engendered by the capitalist production process‐in the political and ideological struggles over European order. The second part introduces the case of the European Round Table. I will claim that the ERT is neither a simple business lobby nor a corporatist interest association, but must rather be interpreted as having developed into an elite platform for an emergent European transnational capitalist class from which it can formulate a common strategy and‐on the basis of that strategy‐seek to shape European socioeconomic governance through its privileged access to the European institutions. It is this latter role of the ERT that will be the focus of the final two parts. As such, the third presents an analysis of the evolution of ERT's strategic project and the initiating role the Round Table played in the relaunching of the integration process from Europe 1992 to Maastricht. Following this, the fourth part will analyse the ideological orientation and strategic outlook of today's Round Table and its current role in shaping what I will call the neoliberal discourse of competitiveness which, I argue, increasingly underpins European governance.     

Women in the Labor Market (Volumes I and II), edited by Marianne A. Ferber

Abstract

European states vary in eldercare policies and in gendered norms of family care, and this study uses these variations to gain insight into the importance of macro-level factors for the work–care relationship. Using advanced panel data methods on European Community Household Panel (ECHP) data for 1994–2001, this study finds women's employment to be negatively associated with informal caregiving to the elderly across the European Union. For the countries included in the study, the effects of informal caregiving seem to be more negative in Southern Europe, less negative in Nordic countries, and in between these extremes in Central Europe. This study explains that since eldercare is a choice in countries with more formal care and less pronounced gendered care norms, the weaker impact of eldercare on women's employment in these countries has to do with the lesser degree of coercion in the caring decision.     

Why is TFP growth sectorally concentrated?

Research shows that total factor productivity (TFP) growth is weak in European countries. This is inter alia attributed to the fact that substantial TFP growth is limited to a few industries. Because TFP growth is typically understood as technological progress, it is concluded that technology diffusion between sectors in Europe is hampered. We use EU KLEMS data sets to decompose sectoral TFP for nine European countries by means of a Malmquist approach in order to identify potential sources besides technical progress. Applying Harberger diagrams, we describe the sectoral distribution of TFP growth, efficiency gains and losses, economies of scale and technological progress. The analysis reveals that technological progress is quite evenly distributed across sectors in most European countries. The wide scattering of TFP growth is explained by deviating efficiency developments and the unused economies of scale. We conclude that the technology transfer between sectors in most European countries seems to work. Therefore, Europe in general does not need a new technology policy, but a further integration of the markets and a reduction of national market entry barriers. This requires further unification of pan-European standards in fields like trade and crafts codes or consumer protection policies.     

Introduction: Is the European Union Capable of Integrating Diverse Models of Capitalism?

ABSTRACT

The causes and consequences of the Euro crisis have led comparative political economy scholars to question whether European integration can accommodate diverse models of capitalism. This special issue addresses two important questions about the compatibility of diverse growth models within the European Union (EU): Are some growth regimes better suited to European integration than others? and does the EU favour a particular constellation of domestic institutions? Contributions within this special issue provide a qualified yes to these questions, concluding that the EU favours export-led growth models whilst it penalises and discourages domestic consumption-oriented growth paths, particularly those that are financed by debt accumulation. While recent comparative capitalism literature highlights that European monetary integration has favoured export-led growth regimes, contributions in this special issue outline that the EU’s prioritisation of export-led growth over domestic demand-led growth is present in other facets of integration, including EU accession, financial integration, the free movement of people, fiscal governance and the Europe 2020 growth strategy. Findings here provide important insights for both the European integration and comparative capitalism literature, highlighting that the unique economic ties being forged within the European project may be problematic for those countries outside northwestern Europe and for workers in low-wage domestic sectors.