The European Stability Mechanism and Domestic Preference Formation During the Eurocrisis: The Role of Non-Governmental Actors
| Author | Uwe Puetter,Mario Munta,Jakov Bojovic |
| Published date | 01 November 2020 |
| Date | 01 November 2020 |
| DOI | http://doi.org/10.1177/1478929919868663 |
| Subject Matter | Special Issue: The Puzzle of National Preference Formation and the Study of the Euro Crisis |
https://doi.org/10.1177/1478929919868663
Political Studies Review
2020, Vol. 18(4) 475 –490
© The Author(s) 2019
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DOI: 10.1177/1478929919868663
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The European Stability
Mechanism and Domestic
Preference Formation During
the Eurocrisis: The Role of
Non-Governmental Actors
Jakov Bojovic, Mario Munta
and Uwe Puetter
Abstract
This article addresses a gap in the Eurocrisis literature by investigating the role of important
socio-economic actors, such as representatives from organised business and labour, as well as
parliamentarians in determining governmental preferences on the European Stability Mechanism
during the Eurocrisis and in more recent discussions on the future of the European Stability
Mechanism. It is argued that the study of the roles of key interest groups, parliaments and public
opinion adds important weight to existing studies and frameworks. It speaks particularly of studies
which suggest that governments enjoyed important leeway in forming their preferences on the
European Stability Mechanism and were driven predominantly by internal technocratic advice and
their integration into EU-level structures of bureaucratic cooperation. The findings show that
initial governmental preferences were not challenged by important interest groups and that where
they were challenged by parliamentary actors, concessions did not affect the original principles of
the European Stability Mechanism design.
Keywords
European Stability Mechanism, preferences, Eurocrisis, the Economic and Monetary Union,
interest groups
Accepted: 20 May 2019
Introduction
As the first permanent macroeconomic stabilisation device the European Stability
Mechanism (ESM) marks a turning point in Eurozone governance. It is based on an inter-
national treaty outside EU law.1 The ESM’s political relevance is not only determined by
Center for European Union Research, Central European University, Budapest, Hungary
Corresponding author:
Uwe Puetter, Seminar für Politikwissenschaft und Politikdidaktik, Europa-Universität Flensburg, Campusallee
1b, D-24943 Flensburg, Germany.
Email: uwe.puetter@uni-flensburg.de
868663PSW0010.1177/1478929919868663Political Studies ReviewBojovic et al.
research-article2019
Special Issue Article
476 Political Studies Review 18(4)
its start-up costs and the resulting financial liabilities but also by its hard-hitting condi-
tionality, which is attached to its financial support schemes. This article joins Smeets
et al. (2019) in noting that while the ESM features in many reviews of Eurocrisis politics,
there is a lack of empirical research on decision-making surrounding its original creation.
Smeets et al. show the importance of executive cooperation at the EU level across differ-
ent institutions and hierarchical levels. Their account is in line with earlier research by
Csehi and Puetter (2018), which finds that member state governments, the Commission
and the European Central Bank (ECB) formed their preferences on the ESM mainly
through their own interactions within the relevant committees, the Eurogroup, the Council
and the European Council, leaving citizens and parliamentarians aside.
Yet, such findings do not chime with the ESM’s potential to provoke political conflict.
The mechanism’s macroeconomic relevance and its burden-sharing implications may
lead to the expectation that decision-making became exposed and influenced by societal
interests, parliamentary actors and public opinion. For example, some may see the ESM
as a vital stabilisation device, which can protect the Eurozone against external shocks.
Opponents of financial transfers may lament that the ESM removes pressure to pursue
reforms while making better-off member states liable for potential credit losses. Pensioners
and trade unions may oppose hard ESM conditionality, which typically involves demands
for cutting social expenditures while receiving Eurozone assistance. The ESM thus
reflects what model of social solidarity the Eurozone adopts (Hall, 2012). The financial
industry may take different views, depending on the degree of financial exposure to
indebted Eurozone governments (Târlea et al., 2019). Public opinion may diverge in
debtor and creditor countries, thus constituting pressure on Eurozone governments who
come to back a common position on the ESM (Kuhn and Stoeckel, 2014). Indeed, the
creation of the ESM sparked political and legal disputes, which could have, but ultimately
did not, halt the creation of the ESM. For example, in Ireland the parliamentarian Thomas
Pringle challenged the ESM as an unlawful arrangement beyond the powers of the EU
treaties (de Witte and Beukers, 2013). This view was rejected in a preliminary ruling by
the European Court of Justice (Case C-370/12). Similarly, the German
Bundesverfassungsgericht refuted complaints by several politicians after a long dispute
in March 2014 (Bundesverfassungsgericht, 2014).
Like the other contributions to this special issue, this article seeks to deepen insights
into processes of governmental preference formation during the Eurocrisis. This article
seeks to address gaps in the Eurocrisis literature by investigating the role of important
socio-economic actors, such as representatives from organised business and labour as
well as parliamentarians, in determining governmental preferences on the ESM during
the Eurocrisis and in more recent reform debates. It is argued that the study of the roles of
societal interests, parliaments and public opinion adds important weight to existing stud-
ies and frameworks. It speaks particularly of studies which suggest that governments
enjoyed important leeway in forming their preferences on the ESM and that they were
driven predominantly by internal technocratic advice and their integration into EU-level
structures of bureaucratic cooperation. The findings show that initial governmental pref-
erences were not challenged by important societal interest groups and that where they
were challenged by parliamentary actors, concessions did not affect the original princi-
ples of ESM design. The analysis is based on a new EU-wide dataset on political influ-
ence in Eurocrisis decision-making, 36 in-depth interviews with non-governmental
socio-economic actors and government officials in nine Eurozone countries and data on
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