Still in the same boat? Studying the effect of constitutive norms on differentiated integration in EMU during the sovereign debt crisis

Abstract

During the sovereign debt crisis, differentiated integration (DI) increased significantly in Economic and Monetary Union (EMU). Numerous studies see norms shared among political elites as a factor homogenising member state preferences, thus mitigating DI in the EU. This paper studies how constitutive norms among member state representatives in ECOFIN and the Economic and Financial Committee (EFC) impacted the evolution of DI in EMU during the sovereign debt crisis. The theoretical argument suggests that the effect of norms on DI varies with similarity. Similar norms among insider and outsider representatives alleviate pressures for DI, while divergence has a reinforcing effect. Empirically, this paper draws upon elite interviews. Results suggest that officials from Euro Area member states (EAMS) adopted special norms when exposed to intensive and insulated interaction within the Eurogroup and Eurogroup Working Group during the sovereign debt crisis. In contrast to non-EAMS representatives, they perceived maintaining the currency area and improving EMU governance structures as their core tasks. This difference in constitutive norms between EAMS and non-EAMS representatives facilitated the reinforcement of DI in EMU. This study highlights the relevance of analysing the multiple conditions developing under the circumstances of DI to understand its self-reinforcement.