Agile or Resilient? Paradigms at odds in the long shadow of Eurocrisis

This paper revisits the Eurocrisis as a pivotal driver of European integration, providing a unique and original look at the interlocking challenges it created. It argues hat the crisis cannot be understood as a singular fiscal or financial failure, but as the manifestation of three interlocking structural trilemmas: macroeconomic adjustment, fiscal sustainability, and financial integration. In turn, the response to these trilemmas heavily influenced, through learning processes, the design of the response to the Covid-19 pandemic. Drawing on optimal currency area theory, fiscal credibility models, and the literature on bank–sovereign interdependence, the paper conceptualizes these tensions as a “triple forcefield” that constrained both crisis dynamics and reform trajectories. It shows how pre-crisis institutional minimalism—rooted in epistemic beliefs about endogenous convergence and reinforced by politicized, incomplete Maastricht bargains—allowed symmetric shocks to translate into asymmetric outcomes, amplifying financial fragmentation and political contestation. Importantly, the paper distinguishes between two ideal-typical responses to these trilemmas: an “agile” paradigm emphasizing national flexibility, fiscal discipline, and market adjustment, and a “resilient” paradigm centered on collective stabilization, risk-sharing, and common policy capacity. Tracing the sequence of Eurocrisis reforms, the paper argues that crisis resolution took the form of a staggered and highly politicized grand bargain, initially dominated by the agile logic but progressively incorporating resilient elements through institutional layering and learning. This process of learning continued well beyond the Eurocrisis, creating - even through failed initiatives- the foundations for fiscal integration that occurred during the Covid-19 pandemic.