The European Union (EU) project of combining a single market with a common currency was incomplete from its inception. This article shows that the incompleteness of the governance architecture of Europe’s Economic and Monetary Union (EMU) was both a cause of the euro crisis and a characteristic pattern of the policy responses to the crisis. We develop a “failing forward” argument to explain the dynamics of European integration using recent experience in the eurozone as an illustration: Intergovernmental bargaining leads to incompleteness because it forces states with diverse preferences to settle on lowest common denominator solutions. Incompleteness then unleashes forces that lead to crisis. Member states respond by again agreeing to lowest common denominator solutions, which address the crisis and lead to deeper integration. To date, this sequential cycle of piecemeal reform, followed by policy failure, followed by further reform, has managed to sustain both the European project and the common currency. However, this approach entails clear risks. Economically, the policy failures engendered by this incremental approach to the construction of EMU have been catastrophic for the citizens of many crisis-plagued member states. Politically, the perception that the EU is constantly in crisis and in need of reforms to salvage the union is undermining popular support for European integration.
The global economic crisis has sapped support for the euro and lowered trust in the European Central Bank (ECB). In doing so, it has also exposed a weakness in the 'output-oriented legitimation' of Europe's economic and monetary union. The common monetary policy and single currency have to be perceived as working if they are to maintain popular acceptance. Whether they actually work is less important than this perception. This raises the prospect that no matter how successful the ECB is in responding to moments of crisis, public opinion may begin to reflect the perception that it has failed. Indeed, the greater the uncertainty experienced during the crisis, the more likely it is that such negative perceptions will predominate. Worse, there is very little that the ECB can do to change popular perceptions or to create new channels for input-oriented legitimation without jeopardizing the credibility of its commitment to price stability or its reputation for political independence.
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A succession of major crises that have tested the resilience of the European Union (EU), has led many observers to predict its imminent demise. The Eurozone crisis, the refugee crisis, Brexit, and rule-of-law backsliding have presented distinct threats to European integration. Yet, while these crises have battered the Union, they have also prompted reforms that have strengthened its authority in significant respects. The coronavirus pandemic is only the latest in a series of such challenges. Time and again during the pandemic, the European Union appeared to fumble, only to pull itself together to forge a common response; time and again, that European response has turned out to be more effective than critics might have imagined and yet less than proponents might have wished. Beneath the tempestuous surface, however, the EU's authority continues to strengthen (Jones 2020).Scholarly reflection on the impact of this long decade of crises has led to a wave of important new works on integration theory. A number of scholars have revisited grand theories of integration --neofunctionalism, intergovernmentalism, and postfunctionalism -to shed light on the impact of crises on the European project (e.g.
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