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The Choice for Europe since Maastricht. Member States' Preferences for Economic and Financial Integration

Periodic Reporting for period 3 - EMU Choices (former EMU_SCEUS) (The Choice for Europe since Maastricht. Member States' Preferences for Economic and Financial Integration)

Reporting period: 2018-01-01 to 2019-06-30

EMU Choices consortium conducted over 200 expert interviews, analyzed over 5000 documents and collaborated with a network of constitutional lawyers to analyze systematically political and legal constraints blocking EMU reforms.

Our findings confirm some common wisdom, dispell some myths and provide insights into mechanisms facilitating further reforms. We have confirmed that ‘Northern’ and ‘Southern’ member states are deeply divided on EMU reforms and showed that the policy conflict structure is single-dimensional which pre-empts the typical EU package deals (Lehner and Wasserfallen, 2019). Moreover, we confirm that reform decisions during the crisis were dominated by governments and EU institutions at the expense of national parliaments, business actors and civil society (Kudrna et al 2019). At the same time, our data show that reforms were characterized by compromise and - contrary to many claims - Germany was not able to impose its preferred legislation on the rest of the EU (Lundgren et al., 2019). We also demonstrate that the policy preferences of EU states were not driven by the usual political concerns, but by fears about the stability of national financial sectors exposed to cross-border liabilities and spillovers (Tarlea et al., 2019).

First, our analysis highlights the importance of preference convergence across the ‘North-South’ divide for overcoming reform constraints. Second, our findings show that reductions of financial sector risks facilitate the convergence of preferences, which suggests that European banking regulations have a conducive effect on the feasibility of further EMU reform attempts.

The cited research articles are available at
EMU Choices highlights

1.EMU Choices have innovated the data collection process by combining analysis of 5000 documents with nearly 200 interviews in all 28 member state capitals and in Brussels. This allowed us to produce more credible and more comprehensive data than previous state-of-the-art projects. These data underpin our analysis and policy recommendations.

2. Four datasets on member states’ policy preferences and reform constraints were collected: (i) EMU Positions covers 47 issues and provides most systematic data on 2010 to 2015 Eurozone reforms; (ii) EMU Formation covers positions and influence of 23 national and international actors involved in the formation of national preferences; (iii) EMU Historical summarizes positions for the 1992 to 2010 period; and (iv) EMU Legal index provides data on procedural constraints member states impose on treaty changes and constitutional amendments induced by EMU reforms. All datasets provide open access.

3. Over 60 original research articles and book chapters published in prestigious journals such as European Union Politics, European Journal of Political Research, Journal of European Public Policy, Governance, Political Studies Review, Journal of Economic Policy Reform or South European Society and Politics. Three book manuscripts are being published by Palgrave Macmillan (“The politics of the Eurozone crisis in Southern Europe: A comparative reappraisal”), ECPR Press (“The Politics of Reforming the Economic and Monetary Union”) and Hart Publishing (“EMU Integration and National Constitutions”). Most texts are available as working papers at

4. Over 70 reports, policy briefs, facts sheets and policy blogs on legal and political aspects of EMU reforms were published at the LSE Public Policy blogs, various national mutations of Euractiv, think tank reviews of EU institutions and project website.

5. Eight dedicated conferences and many workshops or conference panels were organized to discuss and disseminate our results. This includes conferences with high-level policymakers such as the Commissioner for Economic and Financial Affairs Moscovici and leaders of relevant DGs organized with the Austrian National Bank in Vienna and the Centre for European Policy Studies in Brussels. At workshops and panels in Salzburg, Vienna, Rome, Zurich, Nicosia, Stockholm, Miami, Paris, Lausanne, Mons, Bordeaux, Lisbon, Madrid, Glasgow, Nottingham or Denver we have discussed our results with a mix of academic researchers and policymakers.
EMU Choices policy recommendations

1. The EU should support the convergence of preferences through the reduction of financial risks. While there is a consensus on the need for additional risk-sharing mechanisms, the ‘Northern’ opposition is motivated by concerns about legacy losses and risks. They fear that additional crisis prevention and stabilization mechanisms are going to be used to would pay for past losses. De-risking banks can allay these concerns and pave the way towards the agreement on EMU reforms.

2. The EU should develop gradual EMU reform designs. The reform agenda of deepening financial, economic, fiscal and political unions was outlined in numerous reports. However, all proposals including the fiscal backup for bank resolution fund or the common deposit insurance were sidelined. The Commission strives to increase chances of their adoption by reducing the scope of risk-sharing, watering-down controversial provisions, postponing deadlines and resorting to symbolic changes in economic governance. While this increases the gap from initial ambitions, the cumulation of modest reforms can gradually complete the EMU architecture. Consequently, the Commission and member states should continue the reform debate, despite its modest results and the shift of political attention to other crises.

3. The EU should prepare for crisis-induced reforms. The gradualist scenario assumes that the E(M)U will be able to avoid another existential crisis for a sufficiently long time to complete its reforms. However, the Commission should develop another set of reform designs that could be adopted in crisis circumstances. Such policy proposals are likely to differ from the gradualist reforms because they need to stop the crisis from escalating. If member states ever face the stark choice between the completion of EMU or its catastrophic disintegration, they may accept far-reaching reforms. Such proposals need to be debated in advance to gain democratic legitimacy and serve as an ongoing benchmark for the gradualist reforms.

4. The EU should support innovative economic thinking. The EMU Choices project has assessed the political and legal constraints on proposed Eurozone reforms. However, there may be innovative proposals that could improve economic resilience in the EMU, while respecting existing constraints. The unorthodox monetary policies of the ECB serve as a reminder that novel ideas can play a fundamental role. Hence, the Commission should continue to support research in this field.