Theoretical approaches to “the genuine EMU”

: how can theories explain a gradual process for further integration after the crisis?

Abstract

　The Economic and Monetary Union （EMU） has experienced both stagnation and progress, in other words, stop and go, since the original plan was launched in the 1960s. After the financial and fiscal crisis, the EU has declared to move towards a genuine economic and monetary union and has launched a plan for completing EMU. This paper attempts to explain why and how the EMU has been gradually developed.

　While the EU and its member states tackled the financial, fiscal and economic crisis, the EU began to address the shortcomings of the EMU and launched a plan to complete a genuine EMU. Scholars attempt to analyze such institutional development/improvement through various theoretical approaches, such as liberal intergovernmentalism, neofunctionalism, supranationalism, historical institutionalism and “Failing Forward” approach. This paper overviews understandings and analysis that are developed by such theoretical arguments, and argues that such theoretical approaches fail to grasp a dynamism towards further economic and monetary union because they ignore an international factor that pushes/drives member states and the EU towards integration. Followed by the argument, this paper also exhibits how we understand and analyze the relaunch of the plan for completing EMU by considering an international factor.

　Taking account of international factor helps us understand why the EU had experienced several crisis since its launch of the original plan for the economic and monetary union in the 1960s, and understand why the member states accept the gradual monetary cooperation through the 1980s, the start of the euro, and the relaunch of the plan for completing EMU after the crisis: The EU and its member states usually suggest integration projects in order to mediate exogenous financial and economic shocks; but, they cannot achieve complete agreements for integration due to diverged national interests and preferences; such “incompleteness” of the integration triggers financial speculation and crisis; and member states come to accept the initial plan for integration and a new plan for further integration is launched and implemented. European integration alternates between crisis/stagnation and progress, but gradually moves toward a further and more complete integration.