Reforming European Financial and Economic Governance
Chaired by: dr. Aneta Spendzharova (MU) & dr. Shawn Donnely (UT)
The 2008 global financial crisis spurred a series of financial sector governance reforms in the European Union. In the field of regulation, European Supervisory Authorities (ESAs) in banking, securities, and insurance were established as well as a European Systemic Risk Board (ESRB) (Amtenbrink 2012). Hedge fund and credit rating agency regulations were introduced and a number of member states used the enhanced cooperation mechanism to introduce a financial transaction tax (Quaglia 2011). However, uncertainty persists over the relationship between these new European bodies and their national counterparts.
Similarly, in the field of monetary and fiscal union, the ongoing European sovereign debt crisis has triggered a series of reforms in Eurozone governance. The European Financial Stability Facility (EFSF) and the now permanent European Stability Mechanism (ESM) created a ‘bail-out’ fund at the European level. The 6-pack and, more recently, 2-pack legislative packages aim to reform EMU governance and, ultimately, ensure tighter economic coordination and stricter budgetary discipline in the Eurozone (Amtenbrink 2012). However, uncertainty persists over whether the measures go far enough, and what their impact will be. We invite papers examining these tensions in either financial regulation or monetary and fiscal union.
So far, the academic literature has not examined systematically the connections between these two strands of on-going policy reform in the EU. We also welcome papers that bring the two fields together and analyse the linkages between them. For example, the recent agreement to set up a Single Supervisory Mechanism (SSM) was driven by pressures to avoid the national recapitalization of troubled banks, as was done in Ireland, and recapitalize Eurozone banks directly from the European level instead. However, such recapitalization would not work without a corresponding strong oversight body at the European level. Based at the European Central Bank (ECB), the SSM puts the ECB at the forefront of banking sector supervision in the Union. This, in turn, has necessitated revisiting the 2009 legislation on the European Banking Authority (EBA). 2
This panel is linked to the NIG research programme sub-theme on “Multi-level governance and Europe.” We aim to attract papers that shed light on the complex coordination patterns in the fields of financial regulation and monetary and fiscal union. The ongoing EU regulatory reforms have shown tensions in vertical coordination between the newly established European regulatory bodies in financial sector governance and their national counterparts as well as horizontal coordination between those bodies and the European Central Bank.
The tensions between the national and supranational level in Europe have been even more prominent in monetary and fiscal union (Clift and Woll 2012; Jones 2012). Effective multi-level policy coordination requires greater harmonization of economic and fiscal policy among the EU member states. Undoubtedly, the Eurozone sovereign debt crisis has provided a push to reinforce European economic governance. Yet, as the heated debates in Brussels and national capitals have shown, when it comes to bailing out insolvent governments or Eurozone banks directly, member states are mainly concerned about the reaction of their own domestic taxpayers.
We invite papers examining the recent institutional and policy changes in either EU financial regulation or monetary and fiscal union. We also welcome papers that bring these two fields of intense policy reform together and analyse the linkages between them. We are particularly interested in analyses of the challenges and tensions in institutional and policy redesign.
Amtenbrink, F. (2012) ‘Legal Developments’, Journal of Common Market Studies 50 (Annual Review): 132-146.
Clift, B. and Woll, C. (2012) ‘Economic patriotism: reinventing control over open markets’, Journal of European Public Policy 19(3): 307-323.
Jones, E. (2012) ‘European Crisis, European Solidarity’, Journal of Common Market Studies 50 (Annual Review): 53-67.
Quaglia, L. (2011) ‘The “Old” and “New” Political Economy of Hedge Fund Regulation in the European Union’, West European Politics 34(4): 665-82