Planning laissez-faire: Supranational central banking and structural reforms

Author:

Braun Benjamin,Di Carlo DonatoORCID,Diessner Sebastian,Düsterhöft Maximilian

Abstract

The impact of international economic integration on social protection is conditional on the monetary regime. This key insight of both Polanyi and Ruggie has been neglected in the Polanyi-inspired debate on the social consequences of European integration. Focusing on the European Court of Justice and the European Commission as the supranational enforcers of the legal logic of integration, the literature has paid insufficient attention to the role of the European Central Bank (ECB) as the supranational enforcer of the economic logic of integration since monetary union. While Polanyi conceptualized central banking as an institution of non-market coordination that evolved to protect the domestic economy from gold standard pressures, the ECB has acted as an enforcer of disembedding “euro standard” pressures vis-`a-vis national labor market and welfare state institutions. Performing a mixed-methods analysis of public speeches, parliamentary hearings, central bank publications, and interviews with senior decision-makers, we provide the first comprehensive study of the ECB’s advocacy of structural reforms during the period 1999–2019. Despite lacking the mandate or the authority to override national legislation, the ECB, strategically pursuing its organizational and systemic interests, pushed for structural reforms via discursive advocacy and conditionality. Our results show that Europe’s prospects for Polanyian non-market coordination are determined by Frankfurt as much as by Luxembourg and Brussels.

Publisher

Center for Open Science

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