Existing scholarly accounts see the governance of the monetary union’s external relations mainly as a result of internal competences, institutions or preferences. The paper argues that such accounts cannot adequately explain EMU’s external relations: (1) Scholarship that focuses on competences in EMU external representation and the question of who speaks for Europe or the euro neglects the form and substance of internal coordination that takes place below the treaty-level. The legal-institutional framework underpinning EMU is inconclusive and simply does not provide enough “script” to govern its external relations. (2) Explanations that center on member states’ unwillingness to coordinate in the face of preference heterogeneity owe us an answer as to why preferences on international macroeconomic issues should systematically differ from preferences on internal macroeconomic policies (where we are seeing more coordination) or trade policy (where there is indeed joint representation at the WTO).
The paper proposes to bring international-level factors into the explanation of European coordination at the Fund. I argue that institutional factors such as the IMF’s country principle and the constituency system, as well as institutional privileges conferred to certain member states (such as holding an IMF chair) plays a vital role in dissuading European member states from acting in unison at the IMF. Moreover, in order to understand the incentives for European member states to coordinate, it is important to shed light on what is actually being done at the international level: As most policy-making at the IMF involves consultation, but very little actual coordination or collaboration, the incentives for EMU members to pool their sovereignty in order to increase their bargaining power have been limited – at least until the crisis. The revised theories of European coordination of macroeconomic policies at the IMF will be assessed against recent evidence.
