The Effects of Non-Negotiable and Partially-Negotiable Domestic Factors in the Monetary Union: Flexible integration, Skeptical Integration and Europeanized Integration. EUMA Special Series Vol. 5 No. 18, November 2008

Cagossi, Alessandro. (2008) The Effects of Non-Negotiable and Partially-Negotiable Domestic Factors in the Monetary Union: Flexible integration, Skeptical Integration and Europeanized Integration. EUMA Special Series Vol. 5 No. 18, November 2008. UNSPECIFIED.

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Abstract

The aim of this paper is to investigate why convergence is so difficult in the EU Monetary Union. My hypothesis is that Non-Negotiable Domestic Factors (N-NDFs) and Partially-Negotiable Domestic Factors (P-NDFs) play a pivotal role in both monetary Integration and Europeanization. N-NDFs are radically or irreducibly different from, while Partially-Negotiable Domestic Factors (P-NDFs) are significantly different from the ones the EU dictates to its members. I apply these two concepts to redefine two well-known approaches. Looking at “flexible integration”, my hypothesis is that the UK, Denmark and Sweden failed to enter into the Eurozone because some Non-Negotiable leadership’ and citizens’ beliefs prevailed. With regard to “Uploading Europeanization”, Germany was only partly successful in uploading its Deutsche Bank system to the EU level because it was obliged to partially negotiate with other members its proneness to play as a leader in monetary policy. Furthermore, I use N-NDFs and P-NDFs to define two brand new processes. “Skeptical integration” refers to the cases of Italy’s and Greece’s dubious attitudes toward monetary union caused by Partially-Negotiable Domestic Factors (P-NDFs) such as internal policy heritage that heavily constrained the Euro implementation. Finally, “Europeanized Integration” led to new members of Eastern Europe to obtain a successful entrance delay into the Eurozone because a lack of integration process brought to a forced and subsequently unsuccessful Europeanization, meaning that new members integrated in an already Europeanized context. Taken together, these four approaches synoptically explain rejections that occurred in the EMU by both old and new members.

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