Liberal intergovernmentalism and the euro area crisis

Author (Person)
Series Title
Series Details Vol.22, No.2, February 2015, p177-195
Publication Date February 2015
ISSN 1350-1763
Content Type

Abstract:

Liberal intergovernmentalism explains the politics to cope with the euro area crisis by the constellation of national preferences and bargaining power and by institutional choices designed to commit euro area countries credibly to the currency union. National preferences resulted from high negative interdependence in the euro area and the fiscal position of its member states: a common preference for the preservation of the euro was accompanied by divergent preferences regarding the distribution of adjustment costs. These mixed motives constituted a ‘chicken game’ situation characterized by hard intergovernmental bargaining and brinkmanship. Whereas negotiations produced a co-operative solution averting the breakdown of the euro area and strengthening the credibility of member state commitments, asymmetrical interdependence resulted in a burden-sharing and institutional design that reflected German preferences predominantly.

Source Link http://dx.doi.org/10.1080/13501763.2014.994020
Subject Categories
Countries / Regions