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Explaining the Creation of the EU Banking Union: The stability culture, the vicious circle, and the limits of power and interests

Schafer, David (2015) Explaining the Creation of the EU Banking Union: The stability culture, the vicious circle, and the limits of power and interests. [Conference Proceedings] (Submitted)

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    Abstract

    The establishment of the EU banking union presents two major shortcomings of explanations focusing exclusively on material interests and bargaining power: first, they fail to explain the preference formation of the most important actor – the German government. The banking sector was divided between public and private banks, and there is no clear-cut pattern about whose interests the German government promoted. Second, material bargaining power cannot account for Germany’s concessions despite favourable power asymmetries. This article demonstrates that an ideational frame can fill the gaps. Ideas explain Germany’s preferences on the basis of beliefs about the ‘stability culture’. The use of ideas as strategic resource by Germany’s opponents explains why Germany made significant concessions. Germany’s government publicly acknowledged breaking the ‘vicious circle’ between banks and sovereigns as key objective of the banking union. This became a rhetorical trap used by the Southern coalition to force the German government to concessions.

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    Item Type: Conference Proceedings
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > economic and financial affairs > banks/financial markets
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Conference: European Union Studies Association (EUSA) > Biennial Conference > 2015 (14th), March 4-7, 2015
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 23 May 2017 14:59
    Number of Pages: 26
    Last Modified: 31 May 2017 13:17
    URI: http://aei.pitt.edu/id/eprint/79657

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