Document Type

Article

Publication Date

2013

Abstract

This article examines two distinct types of narratives prevalent in academic writing and popular press regarding the causes of the crisis in Europe. The first type, a morality tale, attributes the crisis to profligate southern states that refused to abide by the strictures of the Stability and Growth Pact. The second type is focused on the structural reasons for the crisis, emphasizing the nature of the European Union as a non-optimal currency area, and the euro as a factor in the creation of trade imbalances and competitiveness problems within the euro zone. Each type of narrative suggests a different type of solution. The morality tale tends to see austerity measures and stricter fiscal discipline as the solution, while the structural narratives suggest anything from banking, to fiscal, to full political union or, by contrast, breakup as the potential ways out. The article argues that European politicians have focused on the morality tale and this in turn makes the structural solutions required for the survival of the euro politically unworkable. The article further argues that the European Commission has used the crisis as evidence of the dire consequences following from lack of reforms. Instead of profligate citizens the Commission sees inefficient states that are potentially creating impediments to growth. Notably, the Commission’s vision of desirable reforms for the purposes of growth reach well into the basic structures of European welfare state, on social policy, pensions, and health care, but this time under the guise of a fiscally mandated adjustment that should be binding on Member State through the process of economic policy coordination.

Publication Citation

48 Texas. Int’l L.J 241-266 (2013)