Legitimacy and EMU: Between Monetary Community and Monetary Association

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  • Presentation speakers
    • Clemens Pinnow, Pompeu Fabra University, Barcelona, Spain
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    • Pinnow Clemens - Legitimacy and EMU - Between Monetary Community and Monetary Association.pdf

  Abstract:

  We often hear that the Eurozone crisis has not been/is not merely economic, but also political. What does that mean, exactly? The economic aspect can be expressed in numbers: GDP growth, unemployment rates, interest rates, public debt, etc. The political aspect is more elusive and open to various interpretations. One is that the political crisis consists in the inability of political institutions to ‘solve’ the economic problems that arise from monetary integration. Another is that the crisis exposed and exacerbated a lack of legitimacy. It is this alleged crisis of legitimacy that I am concerned with here. Any assessment of legitimacy starts with a question of principle: Which legitimacy criteria are appropriate for the institution in question? I develop two alternative criteria, one for international institutions we have moral duty to create, and one for those we are merely free to create. Institutions of the former, mandatory kind have to allow those they govern as much democratic control as is consistent with citizens’ willingness to take decisions with a view to the common good. Institutions of the latter, optional kind have to secure the continuous approval of concurrent majorities in their member states. If the Economic and Monetary Union (EMU) is of the mandatory kind, we may call it a monetary community; if it is of the latter, optional kind, we may call it a monetary association. Whether EMU is mandatory or optional, i.e. whether it is a monetary community or a monetary association, depends on the degree of interdependence in the policy areas it regulates and the degree of basic solidarity, i.e. willingness to take decisions with a view to the common good, of Eurozone citizens. I do not attempt to answer conclusively the question whether the Eurozone is a monetary association or a monetary community; my aim is merely to provide a framework for further discussion.

 

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