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  • Author: Aleksandra Maatsch
  • Publication Date: 01-2016
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: This paper investigates how the intergovernmental reform process of European economic governance affected national parliaments’ oversight of this policy area. Which parliaments became disempowered and which managed to secure their formal powers – and why? The dependent variable of the study is operationalized as the presence or absence of “emergency legislation” allowing governments to accelerate the legislative process and minimize the risk of a default by constraining national parliaments’ powers. The paper examines how national parliaments in all eurozone states were involved in approving the following measures: the EFSF (establishment and increase of budgetary capacity), the ESM, and the Fiscal Compact. The findings demonstrate that whereas northern European parliaments’ powers were secured (or in some cases even fostered), southern European parliaments were disempowered due to the following factors: (i) domestic constitutional set-up permitting emergency legislation, (ii) national supreme or constitutional courts’ consent to extensive application of emergency legislation, and (iii) international economic and political pressure on governments to prevent default of the legislative process. Due to significant power asymmetries, national parliaments remained de jure but not de facto equal in the exercise of their control powers at the EU level. As a consequence, both the disempowerment of particular parliaments and the asymmetry of powers among them has had a negative effect on the legitimacy of European economic governance.
  • Topic: Politics, Governance, Law, Reform
  • Political Geography: Europe
  • Author: Fritz W. Scharpf
  • Publication Date: 12-2014
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: At the end of the postwar period, the politically shaped configurations of normatively integrated European political economies differed greatly among “social-market” and “liberal market economies.” Such differences persist even though the characteristic achievements of social market economies have since eroded under the pressures of global capitalism and of European integration. Focusing on European integration from a social-market perspective, there is no question that it has widened the range of individual options. But it has also reduced the capacity of democratic politics to deal with the challenges of global capitalism, and it has contributed to rising social inequality and the erosion of public services and transfers. This paper will first summarize those asymmetries of European integration which have done the most to constrain democratic choices and to shift the balance between capital, labor, and the state by establishing an institutional priority of negative over positive integration and of monetary integration over political and social integration. It will then explain why efforts to democratize European politics will not be able to overcome these institutional asymmetries and why politically feasible reforms will not be able to remove the institutional constraints. The changes that would be required to restore democratic capacities to shape the political economy could only have a chance if present veto positions were to be fundamentally shaken. On the speculative assumption that the aftermath of a deep crisis might indeed create the window of opportunity for a political re-foundation of European integration, the concluding section will outline institutional ground rules that would facilitate democratic political action at both the European and national levels.
  • Topic: Economics, Markets, Politics, Labor Issues, Democracy, Capitalism
  • Political Geography: Europe
  • Author: Fritz W. Scharpf
  • Publication Date: 03-2014
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: This paper attempts a normative assessment of the input and output-oriented legitimacy of the present euro-rescuing regime on the basis of policy analyses examining the causes of present crises, the available policy options, and the impact of the policies actually chosen. Concluding that the regime lacks input-oriented legitimacy and that its claim to output-oriented legitimacy is ambivalent at best, the paper explores potential – majoritarian or unilateral – exits from the present institutional constellation that is characterized by the synthesis of a non-democratic expertocracy and an extremely asymmetric intergovernmental bargaining system.
  • Topic: Economics, Politics, Financial Crisis, Democracy
  • Political Geography: Europe
  • Author: W. Streeck, L. Elsässer
  • Publication Date: 10-2014
  • Content Type: Working Paper
  • Institution: Max Planck Institute for the Study of Societies
  • Abstract: Regional disparities within the European Union have always been perceived as an impediment to monetary integration. This is why discussions on a joint currency, from their very beginning, were linked to compensatory payments in the form of regional policy payments. Structural assistance to poor regions and member states increased sharply at the end of the 1980s. Today, however, fiscal support has to be shared with the new member states in the East. Moreover, due to the financial crisis, the cheap credit that poor EMU member countries enjoyed as a result of interest rate convergence is no longer available. We predict that in the future, some sort of financial aid will have to be provided by rich member countries to poor ones, if only to prevent a further increase in economic disparities and related political instability. We also expect long-lasting distributional conflict between payer and recipient countries far beyond current rescue packages, together with disagreement on the extent of aid required and the political control to be conceded by receiving countries to giving countries. We illustrate the dimension of the distributional conflict by comparing income gaps and relative population size between the center and the periphery of Europe on the one hand and on the other, between rich and poor regions in two European nation-states characterized by large regional disparities, Germany and Italy. While income gaps and population structures are similar in the two countries to those between Northern Europe and the Mediterranean periphery, regional redistribution is much more extensive in the two nation-states. We conclude that this presages a difficult future for the domestic politics of Euroland.
  • Topic: Economics, Politics, Financial Crisis, European Union
  • Political Geography: Europe