The euro crisis, euro reform, and the problem of hegemony

Original Paper
  • 35 Downloads

Abstract

The article applies the contested concept of hegemony to the euro and the eurozone crisis of 2009–12 to critically scrutinise the parameters and limits of the euro reform process. Conceptualising the euro as a ‘public good’ designed to help stabilise and legitimise the EU’s regional market order is a useful ideational starting point for critical inquiry, one that is in line with hegemonic stability theory. However, drawing on neo-Gramscian theory, the article contends that, in practice, the euro has been self-limited through its ‘external’ and ‘internal’ embedding in a neoliberal form of ‘minimal hegemony’. While the reform process has achieved some notable stabilising changes to the support structures and governance of the euro, nevertheless, reform has largely failed to tackle fundamental problems at the heart of the euro’s tendency towards crisis: the single currency’s subordination to a global financial regime dominated by neoliberalism, Germany’s neo-mercantilist dominance of the eurozone economy and fundamental differences of macroeconomic conceptualisation and preferences between the eurozone’s core states, France and Germany. The article critically scrutinises developments in eurozone monetary policy in the wake of the crisis to demonstratively argue that the euro remains locked in to a form of minimal hegemony that constrains the development of the euro as a ‘deep and genuine’ public good.

Keywords

Euro European Union Hegemony Crisis Leadership Germany 

References

  1. Bellofiore R, Gariboldo F, Halevi J (2011) The global crisis and the crisis of European neomercantilism. Socialist Register 2011:120–146Google Scholar
  2. Berggruen N, Gardels N (2013) The next Europe: towards a Federal Union. Foreign Affairs 92(4):134–142Google Scholar
  3. Bibow J (2013) At the Crossroads: The Euro and its Central Bank Guardian (and Saviour?). Cambridge Journal of Economics 37:609-626Google Scholar
  4. Blyth, M. and Matthijs, M (2012) The world waits for Germany, Foreign affairs (snapshots), June 8th Google Scholar
  5. Bretherton, C. and Vogler, J. (2006) The European Union as a global actor, Second Edition (London: Routledge)Google Scholar
  6. Buller J, Gamble A (2008) Britain: the political economy of retrenchment. In: Dyson K (ed) The euro at 10: Europeanization, power, and convergence. Oxford University Press, Oxford, pp 258–273Google Scholar
  7. Bulmer S (2014) Germany and the eurozone crisis: between hegemony and domestic politics. West European Politics 37(6):1244–1263CrossRefGoogle Scholar
  8. Bulmer S, Paterson W (2013) Germany as the EU’s reluctant hegemon? Of economic strength and political constraints. West European Politics 20(10):1387–1405Google Scholar
  9. Cafruny A, Ryner M (2007) Monetary union and the transatlantic and social dimensions of Europe’s crisis. New Political Economy 12(2):141–165CrossRefGoogle Scholar
  10. Clift B (2003) 'The Changing Political Economy of France: Dirigisme under Duress'. In: Cafruny AW and Ryner, M. (eds) A Ruined Fortress? Neoliberal Hegemony and the Transformation of Europe, Maryland: Rowman & Littlefield Publishers IncGoogle Scholar
  11. Cohen BJ (2008) The International Monetary System: Diffusion and Ambiguity. Int Aff 84(3):455–70Google Scholar
  12. Cohen BJ (2012) The Future of the Euro: Lets Get Real'. Review of International Political Economy. 19(4):689-700Google Scholar
  13. Cox RW (1983) Gramsci, hegemony, and international relations: an essay in method. Millennium 12(2):162–175CrossRefGoogle Scholar
  14. Dyson K (2008) The first decade: credibility, identity and intuitional fuzziness. In: Dyson K (ed) The euro at 10: Europeanization, power, and convergence. Oxford University Press, OxfordGoogle Scholar
  15. European Commission (2012) A blueprint for a deep and genuine economic and monetary union: launching a debate, COM 2012 777 final/2Google Scholar
  16. European Commission (2014) Macroeconomic imbalances: Germany 2014, European Economy Occasional Papers No174Google Scholar
  17. Gamble, A. (2014) Crisis without end (Basingstoke: Palgrave Macmillan)Google Scholar
  18. Hall P (2014) Varieties of capitalism and the euro crisis. West European Politics 37(6):1223–1243CrossRefGoogle Scholar
  19. Henning CR (2007) Organizing foreign exchange intervention in the euro area. J Common Mark Stud 45(2):315–342CrossRefGoogle Scholar
  20. Henning, C.R. (2015) The ECB as a strategic actor: central banking in a politically fragmented monetary union, American University School of International ServiceGoogle Scholar
  21. Jacoby W (2014) The Politics of the Eurozone Crisis: Two Puzzles behind the German Consensus. German Politics and Society, Issue 111, 32(2):70–85Google Scholar
  22. Jessop R (2014) Variegated capitalism, das Modell Deutchland, and the Eurozone crisis. J Contemp Eur Stud 22(3):248–260CrossRefGoogle Scholar
  23. Keohane, R. (1980) The theory of hegemonic stability and changes in international regimes, 1967–77,Google Scholar
  24. Kindleberger C (1973) The world in depression, 1929–39. University of California Press, Berkeley CAGoogle Scholar
  25. Lester J (1995) Modern Tzars and princes. Verso, LondonGoogle Scholar
  26. Lipietz A (1992) Towards a new economic order: postfordism, ecology and democracy. Polity, CambridgeGoogle Scholar
  27. Matthijs, M. and Blyth, M. (2011) Why only Germany can fix the euro, Foreign Affairs (Snapshots), November 17th Google Scholar
  28. Milward A (1992) The European rescue of the nation state. Routledge, LondonGoogle Scholar
  29. Morisse-Schilbach, M. (2011) “Ach Deutschland!” Greece, the euro crisis, and the costs and benefits of being a benign hegemonGoogle Scholar
  30. Mosley M (2000) Room to Move: International Financial Markets and National Welfare States. International Organization. 54:737–773Google Scholar
  31. Nedergaard P, Snaith H (2015) 'As I Drifted on a River I Could Not Control': The Unintended Ordoliberal Consequences of the Eurozone Crisis'. J Common Mark Stud 53(5):1094-1109Google Scholar
  32. Ryner M (2015) Europe’s ordoliberal iron cage: critical political economy, the euro area crisis and its management. J European Public Policy 22(2):275–294CrossRefGoogle Scholar
  33. Schafer D (2016) 'A Banking Union of Ideas? The Impact of Ordoliberalism and the Vicious Circle of the EU Banking Union'. J Common Mark Stud 54 (4):961–980Google Scholar
  34. Schild J (2013) Leadership Hard Times: Germany, France, Management Eurozone Crisis. German Politics Society, Issue 106 31(1):24–47Google Scholar
  35. Schimmelfenning F (2015) Liberal intergovernmentalism and the euro area crisis. J European Public Policy 22(2):177–195CrossRefGoogle Scholar
  36. Steinberg F, Vermeiren M (2016) Germany’s institutional power and the EMU regime after the crisis: towards a Germanised euro area? J Common Mark Stud 54(2):388–407CrossRefGoogle Scholar
  37. Strange G (2012) The euro, EU social democracy, and international monetary power: a critique of new constitutionalism. Globalizations 9(2):257–272CrossRefGoogle Scholar
  38. Strange G (2014a) Towards a new political economy of development: states and regions in the post-neoliberal world. Palgrave Macmillan, BasingstokeCrossRefGoogle Scholar
  39. Strange G (2014b) Depoliticisation, the management of money and the renewal of social democracy: new labour’s Keynesianism and the political economy of discretionary constrain. New Political Economy 19(1):138–154CrossRefGoogle Scholar
  40. Thompson H (2015) Germany and the euro crisis: the European reformation of the German banking crisis and the future of the euro. New Political Economy 20:851–870CrossRefGoogle Scholar
  41. Van Apeldoorn, B. (2014) The European capitalist class and the crisis of its hegemonic project, Socialist Register 2014Google Scholar
  42. Van Esch F (2014) Exploring the Keynesian-ordoliberal divide. Flexibility and convergence in French and German leaders’ economic ideas during the euro crisis. J Contemp Eur Stud 22(3)Google Scholar
  43. Varoufakis, Y., Holland, S., and Galbraith, J.K. (2013) A modest proposal for resolving the euro crisis (www.yanisvaroufakis.eu)
  44. Webber D (2014) How likely is it that the European Union will disintegrate? A critical analysis of competing theoretical perspectives. European J Int Relations 20(2):341–365CrossRefGoogle Scholar
  45. Worth, O. (2016) The battle for hegemony: resistance and neoliberal restructuring in post-crisis Europe, Comparative European Politics (Earyview)Google Scholar
  46. Young G (2014) German Ordoliberalism as agenda-setter for the euro crisis: myth trumps reality. J Contemp Eur Stud 22(3):276–287CrossRefGoogle Scholar

Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2018

Authors and Affiliations

  1. 1.University of Western AustraliaCrawleyAustralia

Personalised recommendations