Money and Finance

Abstract

Monetary, financial, and fiscal policy in the European Union (EU) underwent fundamental transformations over the past half-century, including the introduction of the euro, the establishment of the Single Supervisory Mechanism (SSM), and the successive tightening of fiscal and budgetary rules for the Member States. What implications do these developments have for the EU as an economic actor? How can the role of the EU be evaluated in the context of internal integration processes as well as its actorness at the international level? To respond to these questions, the chapter first traces the emergence of the EU’s institutional competences across monetary policy, financial regulation and supervision, and budgetary policy and macroeconomic stabilization from the 1950s onwards. It then investigates the participation of EU institutions and member states in six international organizations and fora for financial and economic cooperation. The subsequent analytical discussion applies the concept of actorness and theoretical explanations derived from liberal intergovernmentalism and principal-agent theory to an exemplary empirical case study, the negotiations over Basel III bank capital requirements in 2010, to understand and explain the EU’s actorness. In addition to offering an encompassing overview of the EU’s internal constitution and external representation, the chapter presents analytical instruments to assess the role and actorness of the EU in contemporary world economic politics.