EU Policies in Times of Crisis

Gerda Falkner

• Publisher: Routledge
• Year: 2018
• Print ISBN: 9781138283749
• eBook ISBN: 9781351980104
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

European integration is in a time of multiple crises, which has a profound impact on different EU policies. This book presents a major collaborative research project uniting international colleagues in the quest for developing a theory: when and how will crisis induce policy breakthrough as opposed to stalemate?

In this volume, a team of renowned authors compare the effects of the recent financial, economic and neighbourhood crises on the EU's main policy domains, including financial market integration, trade, health, migration, research, energy, foreign and state aid policies.

This book was originally published as a special issue of the Journal of European Integration.

The EU’s current crisis and its policy effects: research design and comparative findings

Gerda Falkner

Institut für europäische Integrationsforschung (EIF), Universität Wien, Vienna, Austria

ABSTRACT
The paper summarises a collaborative international research project comparing the impact of the ongoing conglomerate of crises in nine EU policies. All of them saw significant crisis-induced pressures and challenges. Beyond changes in discourse, the crisis-induced pressures have, in many areas, also triggered a rather sizable amount of policy change. Considering EU competences, no single example of re-nationalisation was found, but many new EU-level tasks. The governments were of prime importance in immediate crisis management but supranational institutions and processes continue to matter.

1. Introduction

Europe will be forged in crises, and will be the sum of the solutions adopted for those crises. (Monnet 1978, 417)

A crisis is ‘a state of affairs in which a decisive change for better or worse is imminent’ (Oxford English Dictionary Online 2013), a ‘situation that has reached an extremely difficult or dangerous point’ (Cambridge English dictionary¹). A political crisis is hence a situation in which politicians are confronted with significant need for action, on the one hand, and limited time to accomplish reforms, on the other. It seems that the EU came to such a point at several times in the recent past and has not yet found a way back to secure stability, at least by the time of writing in 2015.

While a final overall account of the crisis and its implications for the evolution of the European integration process therefore cannot yet be given, we can and should know about the development of the EU’s crucial policies in times of crisis. More specifically, this study asks:

•When confronted with such severe challenges, was the EU able to act, or did it get caught in stalemate? After all, blockage is often thought to be the EU’s trademark even in ‘normal’ times, so it might prevail even more in times of crisis. Where the crisis has led to changes in EU policies, how significant are they?

•Additionally, when the EU acted under the great and multiple pressures of the recent crisis, did it fall into a pattern of ‘New Intergovernmentalism’ (Bickerton et al. 2014; Bickerton et al. 2015b; Bickerton et al. 2015a; Schimmelfennig 2015a)? Or was the institutional identity of the EU kept intact with supranational actors such as the Commission and the EP, the manifold committees and expert groups, and finally the European Central Bank, all playing their role?

These issues will be analysed with evidence from nine different policy areas, covering top Europeanised ones (e.g. competition policy, specifically state aid control) as well as others that were even recently still ‘no go’ areas for the EU (e.g. health systems and health care). There is no reason to expect that the specific governance mechanisms existing in a given policy area (from supranational regulation on the one side of the continuum to non-binding coordination, on the other) should actually determine the crisis’ impact in the field. Hence, we opted for a broad approach that also covers areas hardly looked at such as trade and climate protection policy. In a nutshell: This study looks at the broad range of EU policies and compares the effects the recent crisis has so far had and may trigger, in the future. In doing so, this project will go beyond the few systematic and in-depth accounts of the EU’s recent crisis² that exist to date, which have usually laid their focus predominantly on economic issues (Chang et al. 2013; DeBardeleben and Viju 2013; Enderlein and Verdun 2010) and/or cross-cutting topics (Ioannou et al. 2015; Tosun et al. 2015) but not a broad range of policies.

At the outset, a number of conceptual clarifications are in place: What is our understanding of ‘the crisis’ (2 below) and its potential impact on EU policies (3); can we hypothesise when a crisis may rather lead to policy innovation or not (4); and how can we compare policy-specific developments (5)? Subsequently, Sections 6–9 will discuss the major findings of our study.

2. What is ‘the crisis’?

Viewed analytically, there is a conglomerate of specific but interconnected crises impacting the EU. Historically, the collapse of the investment bank Lehman Brothers in 2008 was at the outset of the conglomerate of troubling developments, triggered by downward pressures in the US ‘subprime’ markets for complex housing bonds. This engendered an international ‘financial crisis’: originally, a banking crisis with states ‘saving’ banks at high costs, which in turn soon led to a sovereign debt crisis. In the euro zone, centrifugal economic developments had already challenged economic cohesion when this financial crisis came down on the EU. In addition, the global financial markets speculated against individual countries’ bonds and the euro (often called the euro-cisis), which triggered multiple short-term actions and a high engagement of public finance. Detrimental effects on national and EU budgets as well as mutual distrust of states and banks contributed to a serious economic crisis, particularly in the countries of the euro zone with lower levels of competitiveness. Meanwhile, to make things worse, the financial and economic crises have coincided with dramatic changes in the EU’s neighbourhood (‘Arab spring’, Russian annexation of the Crimea in Ukraine) and an insecurity about Europe’s role in the world based on recent problems in the EU’s transatlantic relations with, e.g. the NSA spying scandal, a decline in terms of global economic importance. These developments also put pressure on the EU’s capacities and hence, for the purpose of our project, need concomitant consideration with the above-mentioned main focuses of our research.

Table 1. The main parts of the EU’s ‘conglomerate of crises’.

Kind of crisis	Main elements	Threats
Financial crisis	A banking crisis triggered sovereign debt crisis and speculations against the euro	Bank runs; after bank rescues: looming bankruptcy of states; speculations against individual countries’ bonds, insolvency of states, heightened divergence within EMU, breakdown of euro area
Economic crisis	Contraction of production, mounting unemployment, fiscal resources decrease	Exploding budget deficits, non-compliance with EMU and stability and growth pact criteria, tensions in euro area
External relations crisis	Arab spring and ensuing migration flows^a, war in Ukraine, change of global distribution of power	Instability in the EU’s immediate neighbourhood, potential inflow of insecurity into the EU, decline of Europe in the world

^aSince mid-2015, many speak of a ‘migration crisis’ in its own right.

Each element listed in T...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• Citation Information
• Notes on Contributors
• 1. The EU’s current crisis and its policy effects: research design and comparative findings
• 2. Public finances in Europe: fortifying EU economic governance in the shadow of the crisis
• 3. Financial market regulation: crisis-induced supranationalization
• 4. Competition policy: safeguarding the Commission’s competences in State aid control
• 5. EU trade policy: persistent liberalisation, contentious protectionism
• 6. Health policy and health systems: a growing relevance for the EU in the context of the economic crisis
• 7. Asylum policy: the EU’s ‘crises’ and the looming policy regime failure
• 8. Research and innovation as sources of renewed growth? EU policy responses to the crisis
• 9. Energy and climate policy: does the competitiveness narrative prevail in times of crisis?
• 10. EU foreign policy: no major breakthrough despite multiple crises
• Index