Cultural Political Economy and Conflict Law – A New Way to Approach the Eurozone Crisis

The immediate effects of the Euro crisis have been tamed but the crisis has soured the relations between Southern and Northern Member states for many years to come. Comparative political economy explains the frictions between North and South as a result of different institutional configurations of national economies (Varieties of Capitalism), different interests of capital and labor coalitions (growth model perspective) or ideational traditions (ordoliberal vs dirigisme). We argue that the exclusive focus of these approaches on either, rational institutionalism, interest coalitions or economic ideas obscures that these three factors come together in a long-term evolutionary trajectory that has formed national economic traditions within the Eurozone since the 1950s. Hence, we argue it serves the analytical purpose better to acknowledge the interaction effects between these factors instead of keeping them artificially separate. To capture this, we first apply and further develop the concept of cultural political economy with insights from the new historical school of national economics. In a second step the cultural political economy approach allows us to highlight the so far ignored importance of ideational traditions of Protestant and Catholic socio-economic ethics in shaping today’s distinct socio-economic positions of European member states. We empirically show how the socio-economic ideologies of Protestant ordoliberalism and social Catholicism influenced national political economies and the European integration process by working through Christian Democratic parties. In the third part of our contribution we show how the culturally grounded diversities of European capitalisms can be accommodated through a conflict law perspective.