The European Economic Constitution in Crisis: A Conservative Transformation

23 Pages Posted: 14 Apr 2021

See all articles by Hjalte Lokdam

Hjalte Lokdam

London School of Economics & Political Science (LSE)

Michael A. Wilkinson

London School of Economics - Law School

Date Written: March 27, 2021

Abstract

The original constitution of Economic and Monetary Union (EMU) rested on a neoliberal approach to interstate federalism à la Hayek. This approach appealed to political elites at the time of the Maastricht Treaty, promising to overcome the so-called ‘crisis of governability’ of the 1970s and early 1980s by constraining the capacity of Member States to respond to democratic demands, without at the same time constructing a comprehensive governmental apparatus at the European level. The original EMU thus sought to delink democratic legitimation from governmental capacity and to constrain what capacity was left. The Eurozone Crisis, however, introduced a ‘crisis of ungovernability,’ revealing that the original constitutional framework had failed in several respects. In efforts to salvage it, European and domestic political elites and institutions sought to correct the capacity deficit but only while imposing, in an authoritarian fashion, neoliberal policies and reforms. While early signs in response to the Covid-19 crisis suggest that the ‘new EMU’ permits a departure from neoliberal prescriptions, the other deficit of EMU is as glaring as ever: democracy remains a problem to be overcome rather than a potential to be realised.

Keywords: Economic and Monetary Union, Eurozone Crisis, neoliberalism, authoritarian liberalism, economic constitution

Suggested Citation

Lokdam, Hjalte and Wilkinson, Michael A., The European Economic Constitution in Crisis: A Conservative Transformation (March 27, 2021). LSE Legal Studies Working Paper No. 03/2021, Available at SSRN: https://ssrn.com/abstract=3813816 or http://dx.doi.org/10.2139/ssrn.3813816

Hjalte Lokdam

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

Houghton Street
London, WC2A 2AE
United Kingdom

Michael A. Wilkinson (Contact Author)

London School of Economics - Law School ( email )

Houghton Street
London WC2A 2AE, WC2A 2AE
United Kingdom

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