Abstract
This chapter deals with vertical differentiation and how the Eurozone has developed into a segment. Before the 2008 financial crisis, differentiated arrangements were not considered a defining trait of the system, since exemptions and opt-outs could be seen as temporary. However, this changed after the Eurozone crisis. The chapter starts by analysing some specific traits of the institutional development of the Eurozone regime. The high level of vertical differentiation involves an incongruence between the Single Market and the single currency as well as between debtors and creditors in the Eurozone. The chapter lays out some dominance effects of segmentation, namely decisional exclusion and pre-emption of choice. Lastly, it presents the analytical advantages of this approach and discusses why segmentation in itself is unstable and self-defeating.
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Notes
- 1.
This chapter draws on Eriksen (2018).
- 2.
Additionally, the Agreement on the Single Resolution Mechanism (SRM) and the Single Resolution Fund (SRF) was signed by 26 member states (all except the UK and Sweden) on 21 May 2014 (European Parliament and Council of the European Union 2014).
- 3.
- 4.
The Eurogroup is an informal body where the ministers of the euro area member states discuss matters relating to their shared responsibilities related to the Euro (European Council 2017).
- 5.
The Six-pack and the two-pack are a set of European legislative measures to develop and strengthen the Stability and Growth pact , introduced in 2010 and 2011 (European Parliament 2014).
- 6.
In the ESM, voting rights depend on the level of investment, which gives Germany 26.98%: ‘The so-called “reverse qualified majority rule” enshrined in the Six Pack, and later generalized by the Stability Treaty, creates the conditions under which the Commission can rely exclusively on creditor countries to take decisions for the Eurozone as a whole’ (Menéndez 2015: 26).
- 7.
The Eurozone Council consists of the Council’s Eurozone members.
- 8.
According to Article 138(1) TFEU, ‘only members of the Council representing Member States whose currency is the euro shall take part in the vote. A qualified majority of the said members shall be defined in accordance with Article 238(3)(a)’ (European Union 2012).
- 9.
For the distinction between environment and the task environment that the organisation is operating within, see Thompson (1967).
- 10.
The EIP is an enhanced surveillance mechanism that aims to ensure compliance with the macroeconomic imbalance procedure that can be activated for countries identified with excessive imbalances (European Commission ).
- 11.
With reference to this article, in October 2016, four EU governments—those of France, Germany, Italy, and Spain—sent a letter to their other EU counterparts urging for closer cooperation on military matters.
- 12.
The Fiscal Compact states that ‘within five years at most following the entry into force of this Treaty, on the basis of an assessment of the experience with its implementation, the necessary steps shall be taken […] with the aim of incorporating the substance of this Treaty into the legal framework of the European Union’ (European Council 2012: Art. 16).
- 13.
The EP has noted that ‘the democratic credibility of European integration has suffered enormously from the manner in which the euro crisis has been dealt with to date’ (European Parliament 2011: H).
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Eriksen, E.O. (2019). Dominance Through Segmentation. In: Contesting Political Differentiation. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-11698-9_4
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