How Eurobonds Relate to European Integration

Policy Study

Mainstream discourse on the European financial and economic crisis seems stuck on the  international divide between “core” and “peripheral” Eurozone countries, with the former advocating for more, the latter for less austerity. By contrast, the three authors of the FEPS Young Academics Tetwork believe that it is at least equally relevant to frame the contrast in political terms, i.e. between conservatives and progressives. The former increasingly advocate for a ‘singularisation’ of nations within Europe while (perhaps not without contradictions) the latter try to formulate ideas of solidarity. Solidarity is indeed fundamental, for it is a major political goal to make Europe and the Eurozone further integrate both as economic unities and as political as well as social communities. However, it should be recalled that ‘more Europe’ and therefore political solidarity would also bring about economic benefits. Thus, the aim of this paper is to highlight the interrelation of this dual order of benefits from solidarity – the community building and the strictly economic one – and the resulting double nature of the European debate, which seems at once highly technical and de-politicised as well as in the same time emotional and ‘over-politicised’.

The three authors – Carlo D’IPPOLITI, Álvaro IMBERNÓN SÁINZ, Benjamin WILHELM – discuss the proposal to launch common European bonds (that, despite the several versions proposed so far, we will generically denote as ‘Eurobonds’) as a relevant example, though they recognise that no single policy instrument is likely to solve all the problems, and a bundle of measures will probably be necessary. Eurobonds are an interesting case study because, on the one hand, the discussion around them has often been connected to the idea of a stricter fiscal union, and they are therefore a good example of how economics and community building are to be thought together. On the other hand, recent developments (especially the Outright Monetary Transactions scheme launched by the ECB and the September 2012 German Constitutional Court ruling on the EFSF) seem to have lowered momentum for an agreement on Eurobonds.

Because the discussion on Eurobonds is both technically and emotionally connoted in the discourse, the purpose of this paper is to connect both discourses. Turopean Union (Antonsich, 2008). The paper is divided into three sections :

First, it provides a short introduction to the debate on the current crisis

Second, it reviews the ‘technical’ arguments in favour and against Eurobonds

Third, it deals with the ‘emotional’ side of the debate, by reconstructing three rhetorical logics at work at the same time:

(a) the growing tendency of nationalization to become a main reference point;

(b) the link between the technical discussions and both national borders and transnationally formulated ideas;

(c) the perspectival difference of proponents and opponents to Eurobonds, a difference that turns out to be not about the goal of implementing Eurobonds: the common narrative is saying that Eurobonds might be established, but: for their present opponents, after several reforms have been enacted, and for their supporters, Eurobonds themselves might lead to a necessary institutional change after their implementation.

Background about the FEPS Young Academics Network

 See the first paper – The European Youth Guarantee: a reality check