Liberal Economic Nationalism and Europeanization: The Rise of Spanish and Italian Banks

Abstract

While Member States committed themselves some time ago to the attainment of an integrated and liberal financial market, the political and economic importance of finance for national economies led many to pursue some form of liberal economic nationalism. Thus domestic financial market reforms were often done in ways that conformed with European objectives but were intended to favor domestic economic actors. This paper explores such liberal economic nationalism in Spain and Italy. Through financial reforms both countries were successful in fostering ‘national champions’ that became major European banks, though the domestic benefits – economic and political – of economic nationalism have been mixed. From the perspective of Europe, however, the economic nationalism pursued by Spain and Italy may well have done more for European financial integration than the policies of other large Member States.

Keywords: liberal economic nationalism, Spain, Italy, eurozone, euro crisis