The European economic constitution in crisis: a conservative transformation

The original constitution of Economic and Monetary Union (EMU) rested on a neoliberal approach to interstate federalism à la Hayek. This approach appealed to political elites at the time of the Maastricht Treaty, promising to overcome the so-called ‘crisis of governability’ of the 1970s and early 1980s by constraining the capacity of Member States to respond to democratic demands, without at the same time constructing a comprehensive governmental apparatus at the European level. The original EMU thus sought to delink democratic legitimation from governmental capacity and to constrain what capacity was left. The Eurozone Crisis, however, introduced a ‘crisis of ungovernability,’ revealing that the original constitutional framework had failed in several respects. In efforts to salvage it, European and domestic political elites and institutions sought to correct the capacity deficit but only while imposing, in an authoritarian fashion, neoliberal policies and reforms. While early signs in response to the Covid- 19 crisis suggest that the ‘new EMU’ permits a departure from neoliberal prescriptions, the other deficit of EMU is as glaring as ever: democracy remains a problem to be overcome rather than a potential to be realised.