Abstract
The financial and eurozone crises highlighted the inadequacy of the original governance structures of the eurozone. In response, a range of reforms were launched, including the creation of a European banking union. In practice, some elements of the banking union were delayed by division among member states and the breakdown of the Franco-German motor, such as the question of the operationalization of the single resolution mechanism and fund or the deposit insurance scheme. In addition, eurozone governance—which would once have been regarded as a technocratic issue—became increasingly politicized. The aim of this article is to study the extent to which the banking union was scrutinized by parliament and to what degree this reflects material interests and ideas. For this purpose, it focuses on salience (i.e., how much attention the issue received) and polarization (i.e., the divergence of positions). The analysis of the resolutions and debates of the German Bundestag and French Assemblée Nationale, i.e., the parliaments of two key states in EU decision-making on banking union, finds that the German government was indeed closely scrutinized, whereas the French government was relatively unconstrained.
Highlights
The financial crisis of 2007 created high costs for taxpayers and led to a hike in sovereign debt when EU member states stepped in to recapitalize banks
The same survey showed that support for European banking supervision, European supervision when public money was spent to rescue financial institutions, and regulation of the financial sector was higher in Germany (80%, 80% and 77% respectively) than in France (73%, 68% and 71%)
Danielle Auroi (EELV) demanded a faster mutualization of funds and criticized the national compartments. These two arguments reflect the importance of material interests, as France has a number of large banks that might be too big for the Single Resolution Fund (SRF), and the resolution of which would still have been costly for French taxpayers in a system based on separate national compartments
Summary
The financial crisis of 2007 created high costs for taxpayers and led to a hike in sovereign debt when EU member states stepped in to recapitalize banks. Existing studies often emphasize the importance of material interests or structural economic factors in explaining government positions in eurozone crisis decision-making (e.g., Tarlea, Bailer, & Degner, 2019), for example, whether banks are largely domestically or foreign-owned (Spendzharova, 2014), on the role of bank capitalization levels and bank-industry ties (Howarth & Quaglia, 2016a), and on the qualitative composition of the banking sector in terms of whether there be large national champions or decentralized networks of cooperative and savings banks (Commain, 2021). French and German ideas and interests with regard to banking union will be analysed based on existing surveys, the literature on the politicization of banking union, and structural economic factors
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
