Between Growth and Stability
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Between Growth and Stability

The Demise and Reform of the European Union’s Stability and Growth Pact

Edited by Lelia Simona Talani and Bernard Casey

Combining economic and political science perspectives, this timely and important book describes and analyses the circumstances and events leading to the demise and subsequent reform of the Stability and Growth Pact (SGP).
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Chapter 2: Is the SGP Crisis also the Crisis of the EU? Assessing the EMU from a Structural, Transatlantic Perspective

Alan Cafruny and Magnus Ryner


1 Alan Cafruny and Magnus Ryner Scholarship on the EU has been overtaken by events. The ‘non’s’ and ‘nee’s’ on the Constitutional Treaty, two decades of economic stagnation in ‘core Europe’, welfare state retrenchment, the increased propensity of Europeans to vote for populist mavericks, the inability of political elites to respond credibly to these phenomena, and the failure of the common foreign and security policy as exemplified by the Iraq War contradict euphoric academic assessments. EU studies have consistently sung the praises of the Union and its project of a common currency. The EMU is widely seen as spearheading a ‘European challenge’ to the United States. For Kupchan, ‘Europe is arriving on the global stage. Now that its single market has been accompanied with a single currency, Europe has a collective weight on matters of trade and finance comparable to that of the United States.’2 Others see the EMU as part of a successful ‘self-transformation’ of the ‘European social model’ (Hemerijck, 2002; Rhodes, 2002). But when the ‘basic force’ and formalistic assumptions about power are abandoned, and when a structural conception is adopted, different conclusions emerge.3 The EU’s aspiration to build a monetary union to promote competitiveness, sustained growth, regional autonomy and social cohesion is self-limiting because the Maastricht design of the EMU is inherently connected to a neo-liberal transnational financial order that displaces socio-economic contradictions from the US to other parts of the world, including Europe. Europe’s subordinate participation within this order pre-empts the possibility of resolving...

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