The EU Last 'Grand Bargain'?: Decision-Making in the Integration Process of the European Banking Union

The creation of Banking Union represents one of the most important steps towards European integration to date. After all the resistance of the member states to centralized banking supervision and regulation, integration continues. However, the integration outcome is not in line with what it is functionally desirable because Banking Union is a hybrid construction with supranational and intergovernmental elements. There is not empowerment of the Commission, but of the ECB which also showed its own will to protect the Euro, which was contested by some member states like Germany. Following these empirical observations, which constitute a puzzle and an “integration paradox”, the research question is: “How can the integration process of Banking Union be explained?” How can we explain its agenda-setting and decision-making processes given this unprecedented euro crisis in the EU? Is this EU institutional reform part of a new intergovernmentalism? To answer the research question, a case study research is conducted and “explaining-outcome process-tracing” is adopted to find the causal mechanisms linking actors’ preferences and positions towards the centralization of banking regulation and supervision at EU level with the outcome of the negotiations. Rational choice can explain why and how collective decision-making occurs, the nature of distributional problems and patterns of actors’ self-interests. This method will be triangulated with qualitative interviews and discourse analysis. Data will mostly consist of primary sources like semi-structured interviews with EU officials, experts and key actors involved in the negotiation processes as well as secondary sources like Commission’s legislative proposals, European Council conclusions, Council’s minutes and press releases, and other documents from private actors and academia, among other sources. Regarding potential contributions, empirically this project will analyze processes of EU agenda-setting, Council decision-making and inter-institutional dynamics in this policy field. Theoretically, this research will construct a case-specific theoretical explanation for this integration outcome.