By Tevfik Murat Yildirim. Originally published on 2012/11/05

Many articles have been written from different sources on the European crisis and its origins, but most of them base their arguments on personal standpoints derived from financial news and officials’ speeches. That is exactly what I have been doing for the last few months. What we see is two distant authorities’ comments on the same topic, European crisis, with different resources and basis. These two authorities, academia and the ‘real’ world, do not seem to be linked to each other on the matter, but of course, this is not the case. For instance, there is much that academia can contribute to the understanding of the origins of the European economic crisis. It seems unlikely that one would find a comprehensive article that brings the two sides together on the ground, but it is possible nonetheless. My intention, of course, is not to take this responsibility; but rather to contribute to the research of the missing pieces of the puzzle by highlighting the common points that link the two sides.

I started to think about the reflection of the European crisis in the academic world right after I came across the influential book of George Tsebelis, Veto Players: How political institutions work?[1]. Even though the book covers wide range of topics, it can underscore the key points of each one of them. In chapter eight, the author explains macroeconomic outcomes by touching upon the relationship between debts, deficits and number of veto players[2]. Indeed, according to the author’s theory, “more veto players will lead to more inertia, and therefore countries with high levels of debt (Italy) will continue to have high deficits while countries with low level of debt (Switzerland) will continue to have low levels of deficit”[3]. Therefore, having more players who have a say in decision-making process will lead to a difficulty in legislation and this will result in ‘policy inertia’. This should hold true regardless of where it is applied.

The second point that I would like to draw attention to is the structure of the EU, which has been critized for being the primary cause of the European economic crisis. There emerged a strong tendency towards rethinking about this structure by emphasizing its inflexibility. For instance, the Eurozone could be blamed first for restricting its members.

First of all, abolishing the monetary union and allowing the member states to act much more freely might be against the nature of the EU. The direction of integration should be from a decentralized system to a centralized one, for there existed some attempts towards European federalism during the first process of European integration[4]. Doubts notwithstanding, the EU, as a nascent federal state[5] is thought to preserve its central authority in order to hold member states together. According to McKay, the EU has set a succesful example of “transformation from an international organization to a federal like state”[6]. Since the separated power system foster struggle between main actors, public administration is more likely to be effective in centripetal organizations. In comparative federalism analysis, unitary and centripetal constitutions show more sound structures in resolving coordination problems than federal and seperatist constitutions. Besides, centripetal organizations help to mediate conflicts, eliminate rivalry attitudes and foster cooperation. On the other hand, decentralized organizations are likely to experience corruption and coordination problems. This is reflected, for instance, by the fiscal problems in the EU due to a lack of fiscal coordination among the members of the Eurozone.

Though the comparative study of federalism cannot fully enligthen the case where the EU’s structural problems lead to multifarious crisis within the union, it can provide us with a broader understanding of centralized-decentralized institutions. The research conducted on federalism studies has an important place in the governing of the EU and its future. Centripetal institutions, where the absolute authority in policy-making is given to a single identity, foster more efficient administration and avoid personalistic goals. Therefore, the EU should be centralized rather than leaving its authority to member states for some flexibility.

The centripetal governance theory in political science provides us with crucial arguments which let us broadly discern how political formations occur and how far they survive in a collective system. Apparently, organizations consisting of divergent parts such as the EU should preserve their absolute authorities to hold the parts together. EU’s member states differ in their market sizes, production capacities, spending levels and debt ratios; most of which have crucial impacts on the European economic turmoil. The only way is to undergo an extended reform in the structure of the EU before the fragmentation of the union becomes a fact.

[1] Tsebelis, G. (2002) Veto Players: How Political Institutions Work. Princeton University Press

[2] To quote the author on the definition of veto players: “In order to change policies – or, as we will say henceforth, to change the (legislative) status quo- a certain number of individual or collective actors have to agree to the proposed change. I call such actors veto players. Veto players are specified in a country by the constitution (the President, the House, and the Senate in the US) or by the political system (the different parties that are members of a government coalition in Western Europe”.

[3] Ibid.

[4] This is expressed, for instance, by the Hague Congress in 1948 (although its outcome is far from satisfactory for the federalists) and the different negotiations that led to the creation of the European Economic Community (Beyen Plan for European Political Community [that unfortunately collapsed]).

[5] There is an enormous literature on Federalism and the EU, generally divided in two sides: One assuming that the EU is a nascent federal state according to Riker’s federalism term, the other assuming that it is an international organization. The systematic comparisons were carried out by Mckay (2001) and Treschel (2006). The supporters of the first view focus their attention on EMU states, not all. The EU, according to many scholars, resembles a nation state: “Other scholars were quick to note that the new policy responsibilities of the EU combined with a constitutional architecture that looked for all intents and purposes like that of a nation state, justified classifying the EU as a nascent federation rather than a sui generis variety of international organization.”(see McKay, p.418).

[6] McKay, D. (2009) The SAGE Handbook of Comparative Politics, Sage Publications Ltd, p.418.

 

About the author: Tevfik Murat Yildim

Originally from Istanbul, Turkey, Tevfik Murat Yildim is living in Milan, Italy. He holds a Bachelor’s degree in Economics, with a focus on Political Economy. He participated in a student exchange programme with University of Bologna, and currently a graduate student at University of Milan. He also undertook some courses at University of Oxford, St.Anthony’s College.

He has been writing for EST for almost a year, but also for NGOs, news agencies and journals. Lastly, he attended conferences in London and Izmir, published two reviews in Political Studies Review (all about Political Economy, Social Policy, Political Change, all of which are his primary concerns). He is planning to pursue a PhD in Political Science.

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