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15 European economic governance in times of crisis: Solidarity, responsibility, and legitimacy in EU debt mutualisation

  • Andreas Eisl and Mattia Tomay
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The EU under Strain?
This chapter is in the book The EU under Strain?

Abstract

Common EU debt instruments (also known as Eurobonds or, more recently, Coronabonds), have often been portrayed as a panacea in EU economic governance. A plethora of proposals emerged in academic and policy circles, especially in times of political and economic crisis. Limited instances of debt mutualisation have existed in Europe at least since the 1970s oil shocks. During the Eurozone crisis, academics and policymakers went as far as to call for the establishment of treasury-like mechanisms mutualising existing national debt and issuing new joint debt securities. Yet, leaders instead mainly implemented loans-based solutions, such as the European Stability Mechanism. Conversely, in 2020, amid the Covid-19 crisis, the EU managed to create an ambitious common debt programme in the context of its Recovery Plan “Next Generation EU”. What changed between these crises? What factors played a role in making some proposals a reality and others unfeasible? To shed some light on these questions, this chapter presents and analyses proposals and instances of EU debt mutualisation during the Eurozone and the Covid-19 crises. By considering their solidarity and responsibility features, it induces a conceptual framework to better understand their legitimacy, and ultimately their political and economic feasibility. It concludes by suggesting how this same conceptual framework may shed light on other domains of EU crisis response.

Abstract

Common EU debt instruments (also known as Eurobonds or, more recently, Coronabonds), have often been portrayed as a panacea in EU economic governance. A plethora of proposals emerged in academic and policy circles, especially in times of political and economic crisis. Limited instances of debt mutualisation have existed in Europe at least since the 1970s oil shocks. During the Eurozone crisis, academics and policymakers went as far as to call for the establishment of treasury-like mechanisms mutualising existing national debt and issuing new joint debt securities. Yet, leaders instead mainly implemented loans-based solutions, such as the European Stability Mechanism. Conversely, in 2020, amid the Covid-19 crisis, the EU managed to create an ambitious common debt programme in the context of its Recovery Plan “Next Generation EU”. What changed between these crises? What factors played a role in making some proposals a reality and others unfeasible? To shed some light on these questions, this chapter presents and analyses proposals and instances of EU debt mutualisation during the Eurozone and the Covid-19 crises. By considering their solidarity and responsibility features, it induces a conceptual framework to better understand their legitimacy, and ultimately their political and economic feasibility. It concludes by suggesting how this same conceptual framework may shed light on other domains of EU crisis response.

Chapters in this book

  1. Frontmatter i
  2. Table of Contents v
  3. List of authors ix
  4. Part I: Contextualising the EU and crises
  5. 1 Introduction: The EU under strain 1
  6. 2 Polity attacks and policy failures: The EU polycrisis and integration theory 27
  7. Part II: The legal and democratic fundaments of the EU
  8. 3 Crisis-driven EU reforms in and beyond treaty limits: Is it time for a treaty change? 51
  9. 4 What happened to the idea of ‘Ever Closer Union’? Differentiation as a persistent feature of European integration 77
  10. 5 The difficulty of upholding the rule of law across the European Union: The case of Poland as an illustration of problems the European Union is facing 95
  11. 6 Representation in polycrisis: Towards a new research agenda for EU citizens 115
  12. Part III: The EU in a changing world
  13. 7 After the deluge: Europe, the European Union and crisis in the world arena 133
  14. 8 EU enlargement in times of crisis: Strategic enlargement, the conditionality principle and the future of the “Ever-Closer Union” 155
  15. 9 The EU after Brexit: EU-UK relations and the latent crisis of withdrawal 173
  16. 10 A strained partnership? A typology of tensions in the EU-US transatlantic relationship 191
  17. Part IV: European policy fields shaped by crisis
  18. 11 Consolidating the fortress Europe: Conceptualizations of solidarity in the EU Asylum System governance post-2015 211
  19. 12 EU Health: From pandemic crisis management to a European Health Union? 233
  20. 13 Leader or laggard? Diversity and minority rights in a union under strain 253
  21. 14 The slow-burning climate emergency and the European Green Deal: Prospects and pitfalls in the polycrisis era 275
  22. 15 European economic governance in times of crisis: Solidarity, responsibility, and legitimacy in EU debt mutualisation 293
  23. Index 319
https://doi.org/10.1515/9783110790337-016

Chapters in this book

  1. Frontmatter i
  2. Table of Contents v
  3. List of authors ix
  4. Part I: Contextualising the EU and crises
  5. 1 Introduction: The EU under strain 1
  6. 2 Polity attacks and policy failures: The EU polycrisis and integration theory 27
  7. Part II: The legal and democratic fundaments of the EU
  8. 3 Crisis-driven EU reforms in and beyond treaty limits: Is it time for a treaty change? 51
  9. 4 What happened to the idea of ‘Ever Closer Union’? Differentiation as a persistent feature of European integration 77
  10. 5 The difficulty of upholding the rule of law across the European Union: The case of Poland as an illustration of problems the European Union is facing 95
  11. 6 Representation in polycrisis: Towards a new research agenda for EU citizens 115
  12. Part III: The EU in a changing world
  13. 7 After the deluge: Europe, the European Union and crisis in the world arena 133
  14. 8 EU enlargement in times of crisis: Strategic enlargement, the conditionality principle and the future of the “Ever-Closer Union” 155
  15. 9 The EU after Brexit: EU-UK relations and the latent crisis of withdrawal 173
  16. 10 A strained partnership? A typology of tensions in the EU-US transatlantic relationship 191
  17. Part IV: European policy fields shaped by crisis
  18. 11 Consolidating the fortress Europe: Conceptualizations of solidarity in the EU Asylum System governance post-2015 211
  19. 12 EU Health: From pandemic crisis management to a European Health Union? 233
  20. 13 Leader or laggard? Diversity and minority rights in a union under strain 253
  21. 14 The slow-burning climate emergency and the European Green Deal: Prospects and pitfalls in the polycrisis era 275
  22. 15 European economic governance in times of crisis: Solidarity, responsibility, and legitimacy in EU debt mutualisation 293
  23. Index 319
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