Neofunctionalism Vs Liberal Intergovernmentalism; The Creation Of The European Stability Mechanism And The Limits Of Political Theory
"The aim of this study is to determine the expanatory and predictive value of the two predominant schools of thought on state integration, namely neofunctionalism and liberal intergovernmentalism, of supranationalist or state-centric theory, with respect to the creation of the European Stability Mechanism (ESM) and the ""Pact for the Euro"" on March 25, 2011 in Brussels. After a 14-month long period of great controversy among the supranational agentsof the European Commission and the representatives of member states of the Economic and Monatery Union (EMU) during 2010, the European Council established a permanent mechanism, which is supposed to grant the stability of thecommon currency. On the one hand there is the ESM, which allows for a redistribution of funds within the EMU in order to bolster indebted member states’ (such as Greece, Portugal, Ireland) fiscal portfolios, and which enhances the automatism of early sanctions imposed by the European Commission in order to more effectively enforce the ""convergence criteria"" as formulated by the Stability and Growth Pact (SGP). On the other hand there is the ""Pact for the Euro"", which represents a permanent intergovernmental conference of EMU and other EU member states aiming for the harmonization of inner-European economic and fiscal policy. This study provides for an analysis of the political process leading to the creation of this new piece of European legislation on the one hand, and on the other of the precise institutional outcome according to the two theories’ assumptions and explanatory mechanisms.The fact, that the political process was decisively influenced by supranational agency as much as intergovernmental bargaing, and further, that ""spillover"" was absent, that issue-specific interests were divergent rather than convergent lead to theconclusion, that both of the theories are only partly fit to account for the process as much as the outcome. This potential step toward de facto economic union and integrated fiscal policy was caused by an external shock, and can therefore hardly be described as incremental. Yet on the other hand, it also represents the consequence of an endogenous process perpetuating a compromise between the parties of the traditional debate among monetarists and economists, which is built on the procedural parallelity of immediate further monetary integration and the harmonization of inner- European economic and fiscal policy."
Neofunctionalism, Liberal Intergovernmentalism, ESM, International Relations
City University of New York - City College
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