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Monetary Union, Fiscal Crisis and the Preemption of Democracy

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  • Fritz W. Scharpf

Abstract

The European Monetary Union (EMU) has removed crucial instruments of macroeconomic management from the control of democratically accountable governments. Worse yet, it has been the systemic cause of destabilizing macroeconomic imbalances that member states found difficult or impossible to counteract with their remaining policy instruments. And even though the international financial crisis had its origins outside Europe, the Monetary Union has greatly increased the vulnerability of some member states to its repercussions. Its effects have undermined the economic and fiscal viability of some EMU member states, and they have frustrated political demands and expectations to an extent that may yet transform the economic crisis into a crisis of democratic legitimacy. Moreover, present efforts of EMU governments to rescue the Euro will do little to correct economic imbalances and vulnerabilities, but are likely to deepen economic problems and political alienation in both, the rescued and the rescuing polities.

Suggested Citation

  • Fritz W. Scharpf, 2011. "Monetary Union, Fiscal Crisis and the Preemption of Democracy," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 6, London School of Economics / European Institute.
  • Handle: RePEc:erp:leqsxx:p0036
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    References listed on IDEAS

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    Cited by:

    1. Dominik Schraff & Frank Schimmelfennig, 2019. "Eurozone bailouts and national democracy: Detachment or resilience?," European Union Politics, , vol. 20(3), pages 361-383, September.
    2. Dermot Hodson, 2019. "The New Intergovernmentalism and the Euro Crisis: A Painful Case?," LEQS – LSE 'Europe in Question' Discussion Paper Series 145, European Institute, LSE.
    3. Nikitas Konstantinidis & Konstantinos Matakos & Hande Mutlu-Eren, 2019. "“Take back control”? The effects of supranational integration on party-system polarization," The Review of International Organizations, Springer, vol. 14(2), pages 297-333, June.
    4. Scharpf, Fritz W., 2018. "There is an alternative: A two-tier European currency community," MPIfG Discussion Paper 18/7, Max Planck Institute for the Study of Societies.
    5. Cristina Fernández & Pilar García Perea, 2015. "The impact of the euro on euro area GDP per capita," Working Papers 1530, Banco de España.
    6. Dorothee Bohle, 2017. "Mortgaging Europe’s periphery," LEQS – LSE 'Europe in Question' Discussion Paper Series 124, European Institute, LSE.

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