Europe’s « Hamiltonian Moment »? On the Uses and Explanatory Usefulness of Historical Comparison

The EU’s decision to allow the European Commission to emit some 850 billion euros in debt (NGEU and SURE) backed by the EU budget in order to fund transfers and cheap loans to member states has been hailed by some, most notably the German finance minister Olaf Scholz, as Europe’s “Hamiltonian moment”, in reference to the first Treasury secretary of the United States of America. This historical comparison has been widely used over the last decade when discussing the historical meaning of the EU’s attempts to deal with the Eurozone crisis and its aftermath. In fact, this particular comparison has been part of a broader trend in scholarship about the Eurozone's development and the debate on "fiscal union" that has sought to draw lessons for the EU from the political history of the US's own institutions of macroeconomic government. Scholars who have used the "Hamiltonian moment" comparison have generally considered the events of the past decade as signaling a decisive leap towards fiscal federalism in the EU. In this paper, I show the relevance but also the limits of this particular historical comparison. In particular, I argue that for a comparative historical analysis to yield useful insights, the historical experience of the US's own "Hamiltonian moment" needs to be disentangled into three distinct aspects, each one of which then has to be compared with the EU's predicament over the past decade. These aspects are the Hamiltonian assumption of legacy State debts incurred during the war of independence, the introduction of a new Constitution granting fiscal powers to the federal government (whose first Treasury secretary was Hamilton) and the socio-economic context in which fiscal policy was wielded at the time. Such a detailed comparative analysis shows that on some aspects the EU has already had its "Hamiltonian moment" while on others such a moment has yet to eventuate. The comparison also highlights the profound dissimilarity in political-economic and socio-historical context between the two cases. I thus argue that whatever institutional similarities one may be able to highlight between the two experiences, one cannot draw a parallel between the historical meaning of the two moments in each polity's development. Finally, on the basis of this comparison, I argue that the EU’s development is best compared with the period 1900-1950 in American political history.