European Union Financial Regulation, Banking Union, Capital Markets Union and the UK

The European Union (EU) undertook major reforms of its economic and finan– cial governance framework […]

Policy Study

27/01/2017

The European Union (EU) undertook major reforms of its economic and financial governance framework after the international financial crisis and the sover– eign debt crisis (for an overview, see Journal of Common Market Studies 2009; Review of International Political Economy 2015; and Journal of European Public Policy 2015). Three financial policy areas stand out: financial regulation, which was significantly revised in the wake of the international financial crisis; Banking Union (BU), which was the EU (to be precise, the euro area)’s response to the sovereign debt crisis; and Capital Markets Union (CMU), which was the EU’s attempt to re- vamp financial activities and the real economy after two consecutive crises. These reforms were complex and intertwined. They built on the existing EU framework, notably the Single Financial Market in the case of financial regulation and CMU. The reforms enacted also substantially modified the existing framework, as in the case of BU, which was designed to complete Economic and Monetary Union (EMU).

This paper examines the dynamics of EU reforms in these policy areas by focusing on the preferences and influence of the United Kingdom (UK). The UK has often been considered as an ‘awkward partner’ in the EU. Stephen George’s classic book, An Awkward Partner: Britain in the European Community (1990), points out the troubled relationship of the UK with the process of European integration since its inception. This paper argues that this view is somewhat unwarranted, especially in the case of financial policies. In these policies the UK has been a foot-dragger, a fence-sitter and a pace-setter, depending on the circumstances. The paper does not discuss in-depth the (often complex) intra-EU negotiations in these policy ar- eas. At the same time, the domestic politics and political economy of these issues in the UK are not investigated in details. The aim of the paper is to explore how the EU policy-process and the domestic arena in the UK interacted and with what outcome. The material is organised as follows. Section 2 discusses some concepts that can be useful in order to examine the preferences and the influence of the member states in the EU policy-process. The empirical sections follow by and large a chronological order, discussing EU financial regulation first (Section 3), then BU (Section 4) and finally CMU (Section 5). 

Read the study

Find all related publications
Publications
21/03/2023

Is an EU-wide approach to the mental health crisis necessary?

Demand for an EU mental health strategy existed before the pandemic but has intensified since. […]
15/03/2023

A five-point agenda for how development cooperation can support EU’s strategic autonomy

European Strategic Autonomy series - Economy & Trade
13/03/2023

EU fiscal rules: Time for a reboot

The EU fiscal rules are one of, if not the most discussed aspects of EU […]
08/03/2023

Abortion in the European Union

Actors, issues and discourse
Find all related news
News
13/03/2023

Digital programme: Algorithms at the workplace

FEPS, together with Nordic partners, launched a Digital Program on algorithmic management and workers' rights
20/02/2023

When will European women start earning the same as men?

Spoiler alert: that day hasn’t arrived yet
20/02/2023

Let’s end involuntary unemployment!

European survey on the perception of unemployment and publicly funded jobs
07/02/2023

New study on how and why social issues have increased in prominence during the EP negotiations

Progress towards inclusive economic transition but need for further improvements in terminology and framing of vulnerable groups
Find all related in the media
In the media

‘No one is unemployable’: the French social experiment

by EUobserver 21/03/2023
EUobserver article on unemployment in the EU with a mention to FEPS' policy brief 'A Job Guarantee for Europe.'

Irak – 20 év után

by Mérce 20/03/2023
'Iraq - after 20 years' Mérce (HU) article by FEPS Secretary General, László Andor.

Wie der Ukraine-Krieg die europäische Politik verändert

by Vorwärts 24/02/2023
'How the war in Ukraine changed European politics' Vorwärts article written by László Andor, FEPS Secretary General and Uwe Optenhoegel, FEPS Vice-President

En Europe, le marché unique fête ses 30 ans, entre satisfaction et désillusion

by Le Monde 01/02/2023
'In Europe, the single market celebrates its 30th anniversary, between satisfaction and disillusionment' Le Monde article with an intervention by László Andor, FEPS Secretary General