ABSTRACT Since 2008, EU governments repeatedly pooled their means of fighting severe crises. This happened in an environment where EU policy-making became more politicised, above all polarising and salient. Politicisation is widely considered to constrain EU decision-making. We study how this constraint was overcome by crisis policy feedback. Our case is sovereign bailout funding, which in the 2010s had politicised EU fiscal governance as never before, raising high hurdles for further fiscal institution-building. Yet, the Recovery and Resilience Facility (RRF), introduced in 2020-2021, amounted to pre-emptive bailout funding that was publicly and controversially discussed. Based on policy process tracking data, we argue that elites strategically politicised the economic response to the Covid-19 pandemic by critically referencing the policy legacy of the European Stability Mechanism in the Euro Area crisis. Our analysis thus provides evidence for negative policy feedback, driven by top-down politicisation. The wider significance of our finding is that politicisation may no longer be a constraint on European integration but facilitating contested polity formation.

Abstract The ratification of the revised European Stability Mechanism (ESM) Treaty remains blocked by Italy—a traditionally pro-risk-sharing Member State—preventing the entry into force of the common public backstop to the Single Resolution Fund (SRF). This undermines the EU’s crisis management capacity and nullifies the risk reduction efforts made by Member States and the banking sector over the past decade. As a result, the SRF operates without a mutualized fiscal safety net. While the fund is currently well capitalized through industry contributions and EU banks have shown resilience in recent stress tests, the lack of a public backstop limits its credibility and usability, especially in the event of a systemic crisis. No sound legal, economic, or operational rationale supports Italy’s refusal to ratify the Treaty. The alternative instrument (DBRI) is functionally unusable; the reform package strikes a reasonable balance between risk-sharing and risk-reduction; and the political stigma attached to the ESM cannot be resolved without modernizing its role. This article proposes two strategic pathways to overcome the deadlock: (i) recognising that the recently agreed Crisis Management and Deposit Insurance (CMDI) reform has materially improved the usability of the SRF and, by extension, the operational relevance of the common backstop—thereby strengthening the case for ratifying the ESM Treaty; and (ii) repositioning the ESM as a more strategic instrument within the EU’s policy toolkit, including through a potential role in supporting EU-wide defence investment and in providing guarantees for collective financial assistance to Ukraine. Unlocking the ESM Treaty ratification is not only critical to completing the Banking Union—it also opens the door to positioning the ESM as a more strategic instrument in Europe’s evolving policy mix. Recent progress on CMDI Insurance reforms makes ESM ratification more urgent, as continued inaction risks weakening the EU’s financial integration and its capacity to mobilize annual investments highlighted in the Draghi Report.

This article examines the European Union’s trajectory as a pillar of globalization in historical perspective, focusing on the interplay between structural openness and uneven development since 1970. Globalization has advanced in cyclical waves marked by episodes of slowdown and retrenchment, yet the EU has consistently maintained an outward orientation. Using trade as a share of GDP as the primary indicator, the paper traces long-term trends in European openness and highlights three critical inflection points: the stagflation era of the 1970s – 1980s, the global financial and eurozone crises of 2008–2013, and the pandemic-driven polycrisis of 2020 – 2024. Institutional analysis shows that each disruption was met with innovations–from the Single European Act and the euro to the European Stability Mechanism and NextGenerationEU – that reinforced openness. At the same time, the benefits of integration have been unevenly distributed: peripheral economies in Southern and Eastern Europe bore disproportionate adjustment costs unless compensated by supranational instruments. The EU’s historical experience thus illustrates both the resilience of globalization through regional integration and the enduring challenge of asymmetry within it.

This paper examines sovereign debt risks in the European Union, which has centralized monetary policy within the euro area, while fiscal policies remain national. Institutional reforms, including common banking supervision, the European Stability Mechanism, the European Central Bank’s market-stabilisation instruments, and a new set of fiscal rules, have mitigated vulnerabilities arising from the interdependence between banks and sovereigns. Stochastic debt sustainability analysis suggests that debt remains sustainable in most EU countries, although substantial fiscal adjustments will be required in some cases. Fiscal reaction function estimates, however, reveal a weakening policy response to rising debt, signalling increased medium-term risks. The paper argues that further adaptation of fiscal rules is needed to encourage investment and provide greater flexibility for low-risk countries. Expanding the pool of common EU safe assets could also help break the bank-sovereign doom-loop, attract foreign investors, and strengthen fiscal sustainability.

Inspired by the encyclical Rerum Novarum and drafted at the end of the Second World War, the Code of Camaldoli became an economic bible for many Catholic politicians. In short, the Code applies the principle of subsidiarity to the economy. This means that, in the event of market failure, the state may intervene to address the economic outcomes. One successful application of these Catholic values was in the operation of the Italian Institute for Industrial Reconstruction in the 1960s. Currently, the export-led growth system is experiencing a period of crisis. To pull Europe out of stagnation, the EU should stimulate domestic demand. Many countries plan to rely on the state to achieve this objective. The EU could use the European Investment Bank Group and the European Stability Mechanism as an industrial policy instrument to oversee ‘European champions’ across a diverse range of sectors, with a particular focus on defence.

Abstract We explore intergovernmental dynamics that led to the establishment of the European Stability Mechanism (esm) as an important institutionalized response to the Eurozone crisis. Using Liberal Intergovernmentalism (il) as a theoretical lens, we formulate expectations that are then explored based on documents, media reports and literature on the various negotiation phases. We demonstrate how the esm was set up as a Eurozone agreement and how preferences of large member states have influenced its contents. Based on our set of li indicators, we find several assumptions to be valid, while others need to be qualified (notably those related to endogenously and exogenously determined government preference changes in the different negotiation stages).

This article analyzes the attempts by Giorgia Meloni’s government (2022–2024) to implement the “Europe of Fatherlands” (Europa delle Patrie) concept – a project aimed at strengthening national sovereignty and promot-ing an intergovernmental approach in Italy’s relations with the EU. Based on annual reports from the Institute of International Affairs (IAI), it examines key initiatives and their outcomes: reform of the Stability and Growth Pact, ratification of the European Stability Mechanism (ESM), the 2024 conflict over EU leadership appointments, and migration policy. The analysis reveals a systemic failure of ambitions to reform the EU. The government’s tangible successes (management of the National Recovery and Resilience Plan/PNRR, fiscal discipline) were achieved through pragmatic cooperation with EU institutions, not defiance of them. Primary reasons for failure include intra-coalition contradictions, Italy’s economic fragility, misunderstanding of EU mechanisms, and the inevitable prioritization of national interests requiring engagement with Brussels. The result is a shift from ide-ology to “Euro-pragmatism”, where survival within the EU system takes precedence over its radical restructur-ing.

ABSTRACT The Single Resolution Mechanism (SRM) was designed to create a common framework for the recovery and resolution of ailing banks headquartered in the euro area. The Single Resolution Fund (SRF) was created to be this mechanism’s financial backbone and to effectively break the doom loop between banks and governments. However, SRF funds were widely seen as insufficient in the event of the need to resolve one or more large banks. In early 2021, euro area member states agreed to changes to the European Stability Mechanism (ESM) so that it could become the financial backstop for the SRF. This paper analyses the existing and proposed arrangements on the SRF backstops, using elements of the principal–agent model. We argue that the proposed use of the ESM as the SRF’s backstop would allow euro area national governments significant control and veto possibilities through the addition of the ‘permanence of the legal framework’ clause.

ABSTRACT This article examines the positions of Italian political parties on the European Union (EU)’s financial response to the COVID-19 pandemic, focusing on three key policy instruments that shaped the European public debate: Eurobonds, the European Stability Mechanism (ESM), and the Recovery Fund (or Recovery and Resilience Facility, RRF). Drawing on the literatures on the inverted U-curve, the responsibility-responsiveness (RR) dilemma, and cleavage politics, the study tests theory-driven hypotheses through a ‘claims analysis’ of Italian parties’ Facebook posts in the three months following the pandemic outbreak. The findings indicate that neither the mainstream/Eurosceptic divide nor a party’s government or opposition status fully explains Italian parties’ positions on the EU’s financial response to the crisis. Instead, party family affiliation emerges as the strongest explanatory factor. Parties within the same ideological family displayed similar positions on all three EU policy instruments and framed the EU’s financial response to COVID-19 primarily in opposition to parties from different ideological families. This supports cleavage theory and underscores that ideology remains the key determinant of both national party attitudes towards the EU and patterns of party competition over European issues.

The Single Resolution Mechanism (SRM), which has been in operation since 2016, is particularly complex. It is headed by a ‘specific’ agency, the Single Resolution Board (SRB), but national authorities as well as national legal frameworks continue to play a decisive role in its operation. The Meroni doctrine also sets limitations on the extent to which (discretionary) powers may be delegated to the SRB. For this reason, very complex mechanisms had to be devised to guarantee that the European Commission and the Council would be sufficiently involved. Also, the SRM only applies to Banking Union Member States (i.e., euro area Member States and states in close cooperation). The co-existence of the Internal Market/EU27 on the one hand and the Banking Union on the other is a further source of complexity, as is the fact that the SRM partially relies on international law (the Single Resolution Fund and perhaps the European Stability Mechanism in the future). In short, the complexities within the SRM are many, and this article sheds light on them by considering complexities of a procedural, institutional and legal nature. It concludes by demonstrating that complexity has increased over time, yet it is probably unavoidable at this stage of European integration. However, efforts could still be made to simplify the applicable legal framework.

The article focuses on the European Union’s crisis financial policy, which plays a pivotal role in maintaining economic stability amidst contemporary challenges, such as financial, sovereign debt, and energy crises. It provides a comprehensive analysis of institutional mechanisms, including the European Stability Mechanism, the Quantitative Easing program, and the Recovery and Resilience Facility. The study explores the functionality of these tools, their design to ensure financial and macroeconomic stability within the EU, and their evolution in response to crises, such as the global financial crisis of 2008 and the COVID-19 pandemic. The article highlights the critical impact of the Banking Union, comprising the Single Supervisory Mechanism and the Single Resolution Mechanism, on reinforcing regulatory frameworks and harmonizing financial governance across member states. Furthermore, the research delves into the RRF’s role in facilitating structural reforms and fostering investments in green and digital transitions. The financial architecture's emphasis on solidarity and shared responsibility underscores its effectiveness in mitigating economic vulnerabilities. The paper also evaluates the feasibility of adopting EU crisis management tools within Ukraine’s economic landscape. Emphasis is placed on the necessity of establishing national coordination platforms that align governmental bodies, regional authorities, and independent think tanks. The study identifies gaps in Ukraine’s regulatory and institutional capacities, proposing tailored strategies to overcome systemic weaknesses. Recommendations include developing mechanisms for financial risk insurance, enhancing SME credit access, and leveraging innovative financial instruments such as guarantee funds and asset securitization. The article underscores the importance of fostering international cooperation and aligning with EU standards to strengthen Ukraine’s resilience against external shocks. By adopting a multi-tiered governance approach inspired by the EU’s model, Ukraine can effectively address its economic challenges.

Since the financial and Eurozone crises, the rules on the functioning of the Economic and Monetary Union (EMU) have changed fundamentally. In this article, I argue that these changes are moving the balance from national to supranational institutions and lead the EMU in a direction frequently referred to as ‘fiscal federation’. At the same time, I contend that these changes are not fully in line with European Union’s primary law, as it stands today. Without contradicting the necessity and effectiveness of these measures on economic terms, I put forward that, to accommodate this substantially modified architecture of the EMU, it would be beneficial to change the primary law in order to clarify the EMU rules. This argument will be made upon an example of three specific policy changes: creation of the European Stability Mechanism, enabling the EU to bail-out states in financial difficulties, introduction of the European Semester, granting the EU the capacity to extensively coordinate the budgetary policies of the Member States, and establishment of the EU Recovery Instrument, empowering the EU to take on itself debt and to redistribute the money across the Member States. For each of these instruments, their legal basis will be thoroughly discussed. I will underline the fact that they were established outside of the regular legal architecture, outlined in the Treaty on the Functioning of the European Union, and suggest specific ways in which the primary law could be modified in order to accommodate these instruments. In conclusion, their combined effect on the operation of the EMU will be analysed and assessed.

The article is dedicated to approaches to assessing the effectiveness of re- gional insurance networks in comparison with classic financial institutions established under the auspices of the UN – International Monetary Fund and World Bank Group. On the basis of the evolution of the anti-crisis tools of international financial organisations, the place of regional financial mechanisms (regional insurance networks) is analysed as a new form of debasement of financial imbalances of the region, mitigating certain shortcomings of the IMF anti-crisis regulation model. Close attention is paid to the taxonomy of the Regional Financial Arrangements (RFA) in terms of forming a resource base and directions of the use of funds, their integration into global safety networks. The European Stability Mechanism is understood as a specified form of the RFA, which has the largest resources, the possibility of attracting them on a market basis and an extended range of areas of use. The author used specially tailored criteria to assess the effectiveness of the RFA in terms of lock of crisis events at the regional level. It is concluded that the RFA can only partially be considered as a lender of last resort for a group of major states, while a special model of the functioning of the European Stability Mechanism allowed to solve the tasks of anti-crisis regulation in the EU.

Abstract How can we explain the system of governance underlying the conditionality regime of the Recovery and Resilience Facility (RRF)? Two contrasting instruments were adopted by the European Union to deal with the economic impact of the COVID‐19 crisis. The initial adaptation of the intergovernmental European stability mechanism was followed by the RRF, an instrument adopted as an add‐on to the EU budget and combining both supranational delegation and intergovernmental filters. Using the lenses of historical institutionalism, and a coalition‐based explanatory framework, this article examines the impact of past institutionalization patterns on the shift towards the RRF combined model. It argues that space for supranational delegation occurred as the result of the incremental innovation of the standard Community regime at work in EU budget‐related policies.

The Administrative Tribunal of the European Stability Mechanism (ESMAT) is an international administrative tribunal hearing appeals brought by current and former staff of the European Stability Mechanism (ESM), which is an international organization. Sitting in Luxembourg, though separate to the European Union (EU) and outside the EU legal order, the Tribunal has its own Statute and Rules of Procedure to supplement the ESM Treaty. As ESMAT reaches the age of ten, and having delivered its first judgments, this articles probes ESMAT’s legal design and rulings to-date to determine the credibility of the international administrative tribunal in providing redress, as an internal justice regime in a standalone international organization. It finds that despite the preadolescent age of ESMAT, it is a well-designed international tribunal, established by law, and can provide the necessary judicial remedies to parties where necessary, given its applicable law.

The European Financial Stability Facility (EFSF) and the European Stability Mechanism (ESM) were set up at the peak of the European sovereign debt crisis to issue bonds and lend to countries under current funding stress. This study analyses investor demand in syndicated bond issuances of EFSF and ESM from 2014 to 2020 on an unprecedented granularity level using a dataset of individual orders with statistical inference. Particularly, we investigate orderbook dynamics for three main aspects: first, we determine the main factors segmenting investor demand. Second, we analyse price dynamics in the transactions and their relation to investor demand. Third, we investigate whether any indications of orderbook inflation might explain the increased volatility in orderbook volume. We identify issuance tranche and tenor as the main determinants of investor demand that are largely anticipated in the notional. Further, we note that ESM is doing economical pricing, where the new issue premium tends to be lower in a market context with larger demand. Lastly, we find a mixture of an increasing number and an increasing volume of orders as drivers of large order books. This confirms that there are no indications of orderbook inflation tendencies in the analysed time period.

The European Union (EU) is now borrowing on the scale of a large state to address challenges ranging from COVID-19 to the war in Ukraine. However, there has been limited comparative research on how pan-European borrowers can and should be held to account. This article offers a normative justification for why such borrowing should be accountable before showing how accountability practices diverge from a set of accountability expectations derived from three baseline theories: liberal intergovernmentalism, sociological institutionalism and historical institutionalism. Through elite interviews and online archival analysis, we show that the vertical accountability of the European Bank for Reconstruction and Development, the European Investment Bank and the European Stability Mechanism to national parliaments in six EU member states varies. Our findings also show that horizontal accountability has been constrained by the European Parliament’s limited involvement in borrowing decisions until recently and that patchy interest from national auditors has undermined diagonal accountability. As EU borrowing increases in importance, these accountability gaps urgently need to be filled.

The article explores President of France N. Sarkozy’s contribution to overcoming the eurozone crisis in 2010 by analyzing the strategy of his diplomatic actions, as well as identifying the goals and motivations underlying them. The rescue of the European currency required a close coordination between Paris and Berlin. Despite differing views on the practical modalities related to the implementation of the European Economic Government project, the Franco-German tandem managed to convince the EU partners to take immediate action aimed at improving public financial management practices. Under the pretext of saving Greece from default, the euro zone from disintegration, and the European Union from economic destabilisation, the President of France, with the support of the German Chancellor, achieved the creation of the European Stabilization Mechanism and the European Financial Stability Fund, which were the first autonomous financial structures in the European Union to be managed directly by the bureaucracy in Brussels. Nicolas Sarkozy initiated the EU financial stability collective tools, which are still operating in the EU and functioning in accordance with the logic proposed by France in the midst of the eurozone public debt crisis.

How do transnational lawyers valorize their expertise in a political and economic crisis? This article argues that knowing how transnational lawyers valorize their expertise is critical to understanding how transnational law evolves and affects society, especially when existing legal frameworks prove to be inadequate and novel practices must pave new paths. Using the acute phase of the Eurozone crisis between 2010 and 2012 as an empirical case, I examine how European Union (EU) legal agents constructed a framework that accommodated the uncertainty of governing a crisis while also mediating the contentious politics between EU Member States. The analysis shows that as intergovernmental bargaining dominates Eurozone crisis governance, EU legal advisors intervene to reconcile these bargains with the EU legal order using novel practices that simultaneously valorize their legal expertise. These practices in effect engender a high degree of interdependence and interconnection between the EU legal order and several intergovernmental arrangements—especially the European Stability Mechanism—leading to the creation of a unique form of EU governance: semi-intergovernmentalism. This article contributes to debates on legal globalization by empirically examining how transnational legal agents valorize their expertise through strategies directed at defending their autonomy while protecting the normative coherence of their transnational legal order: the EU.

This article examines policy change in the EU’s financial assistance regime through a collective learning perspective. By defining a financial assistance regime as the set of rules governing the disbursement and withdrawal of funding to the member states in the context of crisis management, the article seeks to address the following research question: How can we explain the exact form of change in the EU’s financial assistance regime between the euro crisis and the Covid-19 pandemic? The article finds that financial assistance in the EU moved from “intergovernmental coordination” with the European Stability Mechanism to a form of “limited supranational delegation” with the Recovery and Resilience Facility and argues that such a change is due to a collective policy-learning process. This finding suggests that the EU tends to learn from past crisis experiences, freeing itself from established institutional constraints, only when the next crisis becomes a concrete cause for concern. However, when the next crisis strikes, the EU is indeed able to radically alter its practices based on previous policy failures.