— The Making of a Lopsided Union: Economic Integration in the European Economic Community, 1957-1992
EURECON is a 5-year project financed by €1.5 million Starting Grant from the European Research Council (ERC).
It is often said that the euro has faults of conception. But how did this happen? How was the euro made in such a way that it nearly completely overlooked some critical aspects of monetary unions? The assumption is that in the run-up to the 1992 Maastricht Treaty, European policymakers just did not think properly about how to make the Euro work. Was this really the case? Did European policymakers really overlook the economic foundations of European monetary union?
The goal of the EURECON project is to explore European policymakers’ views about how to make the organisation of the European Economic Community (EEC) fit for the creation of a single currency, from 1957 to 1992. The project will look at the origins of the issues that are currently bedevilling the EU by investigating the period between the creation of the EEC in 1957 and the decision to create a European single currency in 1992.
Scholars and policymakers alike regularly recognise that the economic foundations of monetary union were inadequate. But the literature generally assumes that European policymakers just did not think carefully about the economic dimension of European monetary union.
The EURECON project starts from the opposite standpoint. EURECON will look at the proposals to develop economic integration as a means to improve the functioning of the EEC as a possible currency area. The project aims to examine these debates and proposals, understand the reasons for their success or failure, identify the dynamics of political and economic trade-offs and compromises, shifting priorities, and alternative approaches that were abandoned at the time but recycled later.
EURECON will span over 60 months. The project will focus on 5 Work Packages, and constitute a prosopography of the policymakers involved in the discussions:
The possibility of future European monetary unification prompted concern over divergent and often contradictory member states’ national economic policies. Such different national economic policies could increase the disparity in economic performance between member states, in particular in terms of inflation, output, and trade balance. These imbalances would undermine the overall cohesion of the currency zone. The need to better coordinate, if not synchronise, macroeconomic policymaking at the European level was thus a recurrent topic of discussion ever since the 1950s.
Regional disparities in economic development require the development of fiscal transfers at EEC level in order to stabilise a possible future single currency area. This is a common feature of monetary unions, and is designed to help the economic area to better respond in the event of external economic shocks. The project will thus identify and analyse the proposals set out in this field, as well as the pros and cons of these plans.
The Treaty of Rome contained provisions for the free movement of capital that some member states were reluctant to implement. This strand of the project will examine why some governments strongly opposed the liberalisation of capital movements, and how the shift in economic philosophies progressively occurred in the late 1970s-early 1980s in the run-up to the Single European Act. An important objective of this strand is to embed the analysis in the wider, global reflections on capital movements that took place at the Bank for International Settlements (BIS), in the International Monetary Fund (IMF).
A logical corollary to the development of capital market integration is the question of monitoring financial activities on the basis of common rules across the EEC. If capital could flow more freely across borders and banks could operate in several member states, who should then regulate/supervise what and where? As in the case of strand 3 on capital market integration, a critical dimension of the study will be to frame European developments in the wider context of the evolution of international banking regulation and supervision, in particular at the Basel Committee of Banking Supervision (BCBS) in the BIS.
The establishment of a common/single market is enshrined in the Treaty of Rome as the EEC’s main policy goal. The idea was that reducing tariff (common market) and then non-tariff (single market) barriers to trade would reduce costs for businesses, enhance productivity, and generate a net welfare gain, in that they would diminish administrative formalities, increase transparency and harmonise standards.
The project will consider all available primary archival sources from all member states over the 1957-1992 period related to these 5 work packages.
PhD students and Postdoctoral researchers will focus on the role of non-state non-EEC actors and factors influencing European policymaking within the context of EEC economic integration. The PhD/Postdoc projects will undertake specific case studies in the following four areas:
- commercial banks,
- big business,
- trade unions,
- and the spread/influence of economic ideas on the evolution of European economic cooperation and integration
EURECON is supported by an International Advisory Panel including:
Professor Harold James, Princeton University
Harold James is Claude and Lore Kelly Professor in European Studies. Professor of History and International Affairs. Director, Program in Contemporary European Politics and Society. He was educated at Cambridge University (Ph.D. in 1982) and was a Fellow of Peterhouse for eight years before coming to Princeton University in 1986. His books include a study of the interwar depression in Germany, The German Slump (1986); an analysis of the changing character of national identity in Germany, A German Identity 1770-1990 (1989) (both books are also available in German); and International Monetary Cooperation Since Bretton Woods (1996). He was also coauthor of a history of Deutsche Bank (1995), which won the Financial Times Global Business Book Award in 1996, and he wrote The Deutsche Bank and the Nazi Economic War Against the Jews (2001). His most recent works are The End of Globalization: Lessons from the Great Depression (2001), which is also available in Chinese, German, Greek, Japanese, Korean, and Spanish, and Europe Reborn: A History 1914-2000 (2003); The Roman Predicament: How the Rules of International Order Create the Politics of Empire (2006) and Family Capitalism: Wendels, Haniels and Falcks (2006; also available in German, Italian and Chinese). In 2004 he was awarded the Helmut Schmidt Prize for Economic History, and in 2005 the Ludwig Erhard Prize for writing about economics. He is also Marie Curie Visiting Professor at the European University Institute
Professor André Sapir, Université Libre de Bruxelles/Bruegel
André Sapir is University Professor at the Université libre de Bruxelles, Senior Fellow of Bruegel and Research Fellow of CEPR. He has taught at the University of Wisconsin-Madison, the Graduate Institute in Geneva, the College of Europe in Bruges, and was visiting fellow at the IMF, the World Bank and the WTO. He worked 12 years at the European Commission, first as Economic Advisor to the Director-General for Economic and Financial Affairs (ECFIN), and then as Principal Economic Advisor to President Prodi. He has written extensively on European integration, international trade, and globalisation. He holds a PhD in Economics from the Johns Hopkins University in Baltimore.
Professor Antoine Vauchez, CNRS/Paris Sorbonne
Antoine Vauchez is a CNRS Research Professor (Directeur de recherche) in political sociology and law at the Centre européen de sociologie et de science politique (Ehess – Université Paris 1-Sorbonne) and a Permanent Visiting professor at iCourts Research centre (Univ. of Copenhagen). After graduating in political science at Sciences Po Paris (1993) and in public law at the Université Paris 1-Sorbonne (1995), he has received a Ph.D at the European University Institute (Florence, 2000). Ever since, he has been a full-time researcher at the Centre National de la Recherche Scientifique and a Research Professor (since 2010). His research engages with the field of historical sociology, political sociology and critical sociology of law and economics, researching extensively the interactions between forms of expertise, transnational knowledge communities and transnational politics with a particular emphasis on law, economics and European Union polity. He also focuses on issues connecting « law and politics », processes of « judicialization » and the transformation of Western States. His publications cover a variety of disciplinary fields including sociology (American Journal of Sociology, International Political Sociology, Berliner Journal für Soziologie, Sociological Review), political science (European Political Science Research, Journal of European Integration, Politix, Revue française de science politique, etc…) and law (European Law Journal, Law and Social Inquiry). Over the years, he has been a visiting scholar in a variety of universities : he has been a Post-doctoral fellow at the American Bar Foundation (Northwestern University, 2000), a Marie Curie Fellow at the Robert Schuman Center (EUI, 2007-2009), a Senior Emile Noël fellow at New York University (2014), and a Visiting professor in a variety of universities (Bocconi University, Copenhagen University, Columbia University, the Luiss in Rome, Cairo University and the International institute for the sociology of law in Spain).
Professor Amy Verdun, University of Victoria
Amy Verdun Professor of Political Science, Lansdowne Distinguished Fellow in European Integration and Jean Monnet Chair Ad Personam at the Department of Political Science of the University of Victoria, Canada. She has written extensively on issues related to European integration, global political economy, governance, integration theory, policy-making in particular economic and monetary integration as well as comparisons and relations of the EU and the rest of the world. She has published 21 books, more than 120 peer-reviewed articles and chapters. Her articles have come out in journals such as, Acta Politica; British Journal of Politics and International Relations, Canadian Public Administration, Comparative European Politics, European Political Science, European Union Politics, German Law Journal, International Studies Quarterly, JCMS: Journal of Common Market Studies, Journal of European Integration, Journal of European Public Policy, Journal of Public Policy, Politique Européenne, Regulation and Governance, Review of International Political Economy, Transfer: European Review of Labour and Research; West European Politics, and World Politics.
“This research has received funding from the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation programme (grant agreement No. 716849)”