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This paper is structured into four different parts. In the first part the authors analyze the origins of banking and debt crisis in the EU. The state and the evolution of the EU banking sector before the crisis and in its immediate aftermath is analyzed in detail in order to dispel the myth of the existence of an exclusively debt-induced crisis. This part also introduces the notion of financialization into the analysis. The second part analyzes the crisis-related dynamics by using endogenous monetary theory and makes particular use of balance-sheet recession as a concept. The third part introduces political consequences of the banking and debt crisis in the EU by focusing on the political crisis of legitimacy and its impact upon the EU integration process. In order to deal with this topic the authors borrow several concepts from critical international political economy such as transnational elite, knowledge production, and hegemony. We posit a close link between actions of the European transnational elite, crisis origins, and their ramifications. The fourth part focuses on the two most-discussed policy solutions in tackling the crisis: the banking and the fiscal union as well as their feasibility. Additionally, it lays out some fundamental trillemas for creating a viable way out of the crisis which are unfortunately often neglected in public debate. The main argument refers to the growing impact of financialization in the EU and its detrimental effect on the potential for integrated, stable, and prosperous EU economies. The authors explain the changing social, political, and economic landscape and evaluate the main challenges and obstacles to economic and political governance in the EU. The paper is concluded with some heterodox policy recommendations for overcoming them.JEL classification: B52, E51, E52, F34, F50, G01, G20, P48 [ABSTRACT FROM AUTHOR]

The electoral consequences of the Great Recession are analysed in this article by combining insights from economic voting theories and the literature on party system change. Taking cues from these two theoretical perspectives, the impact of the Great Recession on the stability and change of Western, Central and Eastern European party systems is assessed. The article starts from the premise that, in order to fully assess the impact of the contemporary crisis, classic economic voting hypotheses focused on incumbent parties need to be combined with accounts of long-term party system change provided by realignment and dealignment theories. The empirical analysis draws on an original dataset of election results and economic and political indicators in 30 European democracies. The results indicate that during the Great Recession economic strain was associated with sizable losses for incumbent parties and an increasing destabilisation of Western European party systems, while its impact was significantly weaker in Central and Eastern European countries, where political rather than economic failures appeared to be more relevant. In line with the realignment perspective, the results also reveal that in Western Europe populist radical right, radical left and non-mainstream parties benefited the most from the economic hardship, while support for mainstream parties decreased further. [ABSTRACT FROM AUTHOR]

In this article, we review the EU's significance for social policies in the UK. The EU has a limited legal role or institutional capacity to directly regulate the social policies of its member states. This role is even more limited in the case of non-eurozone countries. There are a handful of EU policy measures which have had effects on social policy in the UK. However, these effects have not changed the institutional arrangements for making, organising and delivering social policy, which remain firmly in the hands of UK governments. In consequence, a 'Leave' or 'Remain' result has relatively limited implications for social policy, except in the case of specific social groups: notably for UK and other EU nationals who have lived and worked in at least one other EU country. Other EU legislation and regulation is compatible with the current and historical policy preferences of UK governments and political parties. [ABSTRACT FROM AUTHOR]

This study provides micro-level evidence for the new theories of accountability under globalization. We analyze the micro-level logic that underpins political accountability in democratic countries with highly globalized economies. We contend that voters discount current economic conditions in evaluating incumbent leaders if they perceive the incumbent leader moving the country in the right direction. We test this argument with survey data from eight European countries in 2012, while controlling for potential alternative explanations associated with pocketbook, sociotropic, and clarity-of-responsibility factors. We find that valence considerations related to future directions in the country sustain positive evaluations of leaders’ performance even in the face of negative evaluations of the economy. [ABSTRACT FROM AUTHOR]

This article investigates the extent to which economic ideology affects people's support for European Union integration and how this is conditioned by economic context. We argue that people on the economic left who live in a country with conditions of high income inequality and little state ownership will support European integration, because more integration would move public policy in a left-wing direction. By contrast, people on the left who live in a country with conditions of low income inequality and widespread public ownership are likely to be eurosceptic, as further integration would result in a more right-wing public policy. We empirically confirm our hypotheses and discuss the implications for European Union democracy. [ABSTRACT FROM PUBLISHER]

Political fragmentation has been widely recognized by political economists as an important cause for fiscal profligacy in democratic market economies because of the common pool nature of fiscal resources. These predictions, however, sit uneasily with the notion of governmental veto players’ ability to block each other’s spending plans for electoral purposes. Applying the logic of a bargaining-game between veto players in a political budget cycle framework, I first model that multiple players in the budget game are in fact likely to moderate pre-electoral budget outcomes. Empirical results from a cross-section time-series analysis in EU member states provide corroborative evidence that fiscal electioneering is indeed more prevalent among cohesive, single-party settings. The findings are robust to alternative identification of elections, fiscal changes and sample selection. [ABSTRACT FROM PUBLISHER]

Orthodox integration scholarship failed to identify the factors leading to the euro area (EA) economic and financial crisis because of weaknesses that Horkheimer identified in ‘traditional’ theory: disciplinary splits and a tendency to idealize from particular instrumental perspectives. By contrast, critical political economy offered a plausible and coherent elucidation of the emergent properties and limits of finance-led capitalism and their concrete manifestation in the EA. This contribution both reviews state-of-the-art critical political economy research on the EA crisis and makes a distinct contribution to it. In addressing the puzzle of why not only the Economic and Monetary Union persists despite morbid symptoms but why crisis management is extending and deepening a discredited finance-led capitalism, the contribution synthesizes theories of transnational class formation and inter-state relations, and proposes that Europe is caught in an ordoliberal iron cage. [ABSTRACT FROM PUBLISHER]

This is the introduction to a special collection of contributions that analyse the financial and economic crisis through various theoretical lenses. Accordingly, it does four things. First, it describes the EU's institutional response to the crisis in order to provide a reference point for the contributions. Second, it summarizes the contributions. Third, it compares them in order to develop a theoretical dialogue. Finally, it answers the fundamental question at the heart of the crisis and this special collection: why did Economic and Monetary Union become deeper and more integrated when many feared for its survival? [ABSTRACT FROM AUTHOR]

Further integration in the European Union (EU) increasingly depends on public legitimacy. The global financial crisis and the subsequent euro area crisis have amplified both the salience and the redistributive consequences of decisions taken in Brussels, raising the question of how this has influenced public support for European integration. In this contribution, we examine how public opinion has responded to the crisis, focusing on support for monetary integration. Interestingly, our results show that support for the euro has remained high within the euro area; however, attitudes are increasingly driven by utilitarian considerations, whereas identity concerns have become less important. While the crisis has been seen to deepen divisions within Europe, our findings suggest that it has also encouraged citizens in the euro area to form opinions on the euro on the basis of a cost–benefit analysis of European economic governance, rather than relying primarily on national attachments. [ABSTRACT FROM AUTHOR]

Liberal intergovernmentalism explains the politics to cope with the euro area crisis by the constellation of national preferences and bargaining power and by institutional choices designed to commit euro area countries credibly to the currency union. National preferences resulted from high negative interdependence in the euro area and the fiscal position of its member states: a common preference for the preservation of the euro was accompanied by divergent preferences regarding the distribution of adjustment costs. These mixed motives constituted a ‘chicken game’ situation characterized by hard intergovernmental bargaining and brinkmanship. Whereas negotiations produced a co-operative solution averting the breakdown of the euro area and strengthening the credibility of member state commitments, asymmetrical interdependence resulted in a burden-sharing and institutional design that reflected German preferences predominantly. [ABSTRACT FROM PUBLISHER]

The article analyzes European Commission Directorates-General (DG) online consultations in relation to upper-class influence and business interests in European Union (EU) policy making. Topics include bias in political participation, the Your Voice in Europe online portal, and the influence of business interests on EU political representation.

The article analyzes the potential for far right political parties to gain ground in May 2014 elections for the European Union's (EU's) European Parliament (EP). Parties noted include the French National Front (FN), the Freedom Party of Austria (FPÖ), and the Golden Dawn party in Greece. Other topics include the economic impact of the Great Recession in 2008 on far right parties, differences between extreme and radical political parties, and the notion of second-order election cycles.