Governance and the Eurozone: Framing Questions

Last fall, I posted about possible governance effects of eurozone crisis on the EZ and, more broadly, the EU.  I raised questions not as an expert on European institutions, law, or governance, but as someone with a long interest in governance and legitimacy questions for the international system.  They elicited some very interesting responses, particularly from University of Connecticut’s Peter Lindseth (who blogs on these topics at Eutopia).  I also collected a number of noteworthy responses by email from other EU law scholars.

During the last few months, the sense of crisis has been so overwhelming, and the serial responses so rapid-fire, outside international economic law observers like me haven’t been able to to do much more than, well, monitor the Twitter feed.  Without wanting to say that the crisis has passed – it hasn’t – the pace of market events has eased somewhat for the moment, and perhaps now is a better moment to ask questions about the implications and meaning, if any, of the EZ crisis for governance of the EU.  Over the next few months, I propose to do that, and hope to persuade both fellow OJers with an interest in economic law and governance issues to weigh in – as well interested outside experts in law, economics and economic law, and governance both generally and the EU specifically.  I have general views on governance, to be sure, but in this question of the EU, I do not hold myself out as expert and see my role more as facilitator trying to frame questions for discussion.

I’d like to spark more discussion of international economic law, governance, international organization, and other such topics here at OJ.  I plan to blog much less here about national security and related questions during this upcoming year, and much more about these topics.  Feel free to raise issues in the comments, email me directly, or to offer responses at other blogs and forums to which I can link.  Meanwhile, what kinds of categories/questions might need exploring?  A few possibilities, no special order:

• Why is a crisis in the EZ a question of governance of the EZ at all – much less the EU?  Isn’t the euro just an economic and business tool, hugely useful in promoting efficiencies across the EZ, but not more than that?  The only relevant governance questions are those related to the economic, financial, and banking governance of specific EZ institutions, so why try to make it out as broader than that?  In any case, the “governance” issues involved are all essentially technical ones belonging to economists and finance specialists.
• What is the role of lawyers or legal academic in addressing the EZ crisis?  One possible answer is that it is surely very limited.  The role of lawyers is no more than that of “scribe,” putting into words policies that are necessarily established by other kinds of experts or by political actors.  Governance of the EZ lies in the hands of technocrats in economics and finance, or else in the hands of political leadership doing purely political things.  Lawyers simple give expression to arrangements established elsewhere.  What independent analytic role do lawyers or legal academics have?
• If lawyers have anything to offer beyond services as scribes, it is in a role “external” to the formation of the “best” policy, yes? No?  Lawyers can read the words of treaties, agreements, court cases, etc., that refer to the governance structures that are in place at this moment.  They might find limiting language (e.g., no bailouts of governments) or come up with enabling language or interpretations of governance documents.  But this role is “external” to the formation of best policy, either preventing or permitting on the basis of current governance arrangements.  It does not help analytically to determine the optimal policy.
• What is the role of legitimacy, trust, and shared expectations in channeling the crisis, responding to it, and in the landscape that succeeds it?  And is this not an area of peculiar analytic expertise of lawyers and legal academics, given that law shapes institutional structures that markets and market participants either trust or not?  Those institutional structures shape, constrain, or enable the legitimacy of the polices dreamed up by other kinds of experts – but without which, the policies cannot succeed, either with the markets or with the European populations that must live with them.
• In what ways, if any, does a Europe much more divided by its economic possibilities, much more visibly unequal across national borders, discover that its governance structures are altered, both at the national and EU level?  Will movement of goods, capital, and people remain as mobile as before?  Capital controls by countries facing the outflow of banking deposits, from Greece to Germany?  What about people?  Are there circumstances in which comparatively destitute southern Europeans move to richer countries – what about competition for jobs, but also what about welfare benefits?
• Is economic governance of the EZ truly divorced from non-economic governance of the EU?  If an argument for the euro was that it was an essential part of the glue of the European project, in good historical materialist fashion laying the economic base for superstructural institutions, doesn’t that imply the opposite if the glue dissolves?   What might this mean, if anything, for such institutions as the ECJ or the ECtHR and their role in “values” governance of the EU?
• Does the EZ crisis portend changes in the role of the EU as such in the wider world?  Reduced funding for foreign assistance by the EU and national governments and ever-more straitened national defense budgets? How might it affect the EU and its national governments’ relations with China (and Asia more broadly)?

There are other categories of questions, I’m sure, and I would be most interested in hearing them and adding them to the list for discussion.  But these are some that occur to me as someone who studies governance in the international community generally.  I hope we can explore them over the next few months.