The Ideological Shade of the Constitutional Order: Public Law and Political Economy in the Eurozone

iCourts Working Paper Series, No. 231, 2021

IMAGINE Working Paper No. 14 (2021)

35 Pages Posted: 13 Jan 2021 Last revised: 10 Mar 2021

See all articles by Hjalte Lokdam

Hjalte Lokdam

London School of Economics & Political Science (LSE)

Date Written: January 7, 2021

Abstract

This paper argues that the Economic and Monetary Union (EMU) created at Maastricht conformed to the neoliberal theory of interstate federalism in seeking to constitute structural conditions that circumscribed the effective exercise of activist public authority at both the Member State and European level. A response to a perceived ‘crisis of governability,’ it was designed to address the problem of excessive, and ineffective, governmental interventions in economic matters. By separating monetary and fiscal policy, the EMU ensured that no single public authority at the Member State or European level could control all the main levers of economic government. The Eurozone Crisis challenged this construct by emphasising the need for a coherent and effective exercise of public authority. The problem was thus no longer an excess of government but the absence of effective governmental authority for the EMU as a whole. Eurozone Crisis reforms introduced a greater scope for federal interventions in the domestic affairs of Member States and such reforms have elicited a new constitutional imaginary, expressed by European elites, that emphasises the need to generate ‘European sovereignty.’ This imaginary departs radically from the original EMU by foreseeing an omnicompetent European governmental apparatus that is able to intervene in, and control, economic developments across the Union in accordance with political objectives. The constitutional imaginary of the EMU can thus no longer meaningfully be called neoliberal. The early response to the COVID-19 Crisis, furthermore, highlights that the objectives pursued under the reformed EMU may depart from the set of policies traditionally associated with neoliberalism. What it should be called instead, however, remains unclear.

Keywords: Economic and Monetary Union, Eurozone crisis, neoliberalism, federalism, economic constitution, law and political economy

Suggested Citation

Lokdam, Hjalte, The Ideological Shade of the Constitutional Order: Public Law and Political Economy in the Eurozone (January 7, 2021). iCourts Working Paper Series, No. 231, 2021, IMAGINE Working Paper No. 14 (2021), Available at SSRN: https://ssrn.com/abstract=3761782 or http://dx.doi.org/10.2139/ssrn.3761782

Hjalte Lokdam (Contact Author)

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

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