The Trilemma of European Economic and Monetary Integration, and Its Consequences

Published date01 March 2016
Date01 March 2016
The Trilemma of European Economic and
Monetary Integration, and Its Consequences
Jukka Snell*
Abstract: The article analyses trade-offs between sovereignty, mass politics and economic
and monetary union (EMU), employing Rodriks paradox of globalisation. The logic of
EMU is incompatible with sovereigntyand mass politicsonly two of the three can coexist.
It is argued that three different answersto the trilemma can be observed in the EU practice.
In the initial EMU, integration was limited to safeguard mass politics and sovereignty.
Member States were free to seteconomic policies in response to domestic mass politics. This
proved unsustainable. During the crisis, democracy was sacriced to bolster integration,
while sovereignty was maintained.Rules on scal discipline and macroeconomic imbalances
constrain mass politics, and non-democratic institutions have acquired more prominent
roles. Finally, long-termplans for a genuine EMU envisage the strengthening of integration
and moving the locus of democracy to the EU level, while weakening sovereignty. The
analysis carries implications. If national courts insist on sovereignty and democracy, the
likely consequence is an unworkable EMU, damaging the output legitimacy of the EU.
The model adopted in the crisis reinforcesthe elite nature of the EU, undermines democracy
at the national level and may bolster politicalextremism. This leaves the task of building the
preconditions for democracy at the European level.
The euro crisis and the response to it can be and have been analysed from many differ-
ent angles.
One perspective is substantive. What are the legal changes that have taken
place? How does the current legal framework differ from the original constitutionof
the economic and monetary union (EMU)? Another perspective is institutional. How
have the roles of, and the interplay between, the various European institutions changed
as a result of and in response to the euro crisis? Is a new form of intergovernmentalism
being established? If so, how does this account for the strengthened role of the Commis-
sion and the European Central Bank (ECB)? Yet another perspective is constitutional.
How has the relationship between the EU and its Member States, in particular those
that have adopted the euro, been altered? What kind of powers have and can be trans-
ferred from one level to another?
* Professor of European Law, University of Turku and Swansea University. Earlier versions of this article
have been presented in Amsterdam, Cyprus, Leiden and Turku in the course of 2014 and 2015. I am
grateful for the comments of Agustín José Menéndez and two anonymous referees.
The most comprehensive legal analysis to date are A. Hinarejos, The Euro Area Crisis in Constitutional
Perspective (Oxford University Press, 2015), and K. Tuori, The Eurozone Crisis: A Constitutional Analysis
(Cambridge University Press, 2014).
European Law Journal, Vol. 22, No. 2, March 2016, pp. 157179.
© 2016 John Wiley & Sons Ltd., 9600 Garsington Road, Oxford, OX4 2DQ, UK
and 350 Main Street, Malden, MA 02148, USA
The present article seeks to combine several of these perspectives. It does so by exam-
ining and applying Dani Rodrikstrilemma of globalisationto the context of the
European EMU.
My central claim is that Rodriks trilemma also applies to European economic and
monetary integration: you cannot have at the same time a well-functioning EMU, mass
politics and nation states. It is further argued that, in the early years of monetary integra-
tion, the EU opted for a model where mass politics and nation states were preserved, but
at the expense of the coherence of the design of EMU. I call this the early EMU. During
the euro crisis, the EMU model changed. In order to ensure the functioning and even the
survival of EMU, the substance of mass politics was reduced, while the role of the nation
states was maintained. I call this the crisis EMU. Finally, an alternative has been put
forward, most notably in the Commissions blueprint for a deep and genuine EMU.
In its proposals, the Commission puts forward a plan for the strengthening of mass pol-
itics at the European level, at the expense of nation states. I call this the blueprint EMU.
If the analysis offered is correct, it has profound implications.
If we remain commit-
ted to EMU, we must recognise the trade-off between maintaining mass politics and
maintaining nation states. The defence of the latter, for example by national constitu-
tional courts and national elites, will come at the cost of disempowering citizens. There
is a danger that this will render various forms of extremism more appealing and even
rational as a revolt against mass politics that has been robbed of its substance and as
an attempt to create a radical change in or overthrow the system. However, if we choose
instead to focus on defending national sovereignty and domestic democracy,
we may
be saddled with a poorly functioning currency union that will sap the output legitimacy
of the whole European project that runs the risk of being associated with misery,
rather than with prosperity.
Dani Rodriks Trilemma
Dani Rodrik has put forward the notion of the trilemma of globalisationin a number
of places.
The basic idea is simple: you cannot have at the same time deep international
economic integration, nation states and mass politics. Only two of the three can coexist.
D. Rodrik, How Far Will International Economic Integration Go?(2000) 14 Journal of Economic Perspec-
tives 177186. For an earlier attempt from a political science perspective, see B. Crum, Saving the Euro at
the Cost of Democracy(2013) 51 Journal of Common Market Studies 614630. See Rodriks recent views in
Future of European Democracyat
Commission Communication, A Blueprint for a Deep and Genuine Economic and Monetary Union:
Launching European Debate(2012) COM 777 nal/2, available at
The fundamental signicance of the crisis for European integration more broadly has also been emphasised,
for example in the reports for the XXVI FIDE Congress; see F. Amtenbrink, General Reportat 75 and
J.-P. Keppenne, Institutional Reportat 179, both in U. Neergaard, C. Jacqueson, and J.-H. Danielsen
(eds), The Economic and Monetary Union: Constitutional and Institutional Aspects of the Economic Gover-
nance within the EU (DJØF Publishing, 2014).
See P. Leino and J. Salminen, Should the Economic and Monetary Union Be Democratic after All? Some
Reections on the Current Crisis(2013) 14 German Law Journal 844868, for an analysis of the crisis from
a democratic perspective.
Above, n. 2, and D. Rodrik, The Globalization Paradox: Why Global Markets, States, and Democracy Cant
Coexist (Oxford University Press, 2011).
The Trilemma of Economic and Monetary IntegrationMarch 2016
© 2016 John Wiley & Sons Ltd158

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT