Doing Away with the Sovereign : Neoliberalism and the Promotion of Market Discipline in European Economic Governance

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http://hdl.handle.net/10138/327255

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Ojala , M 2021 , ' Doing Away with the Sovereign : Neoliberalism and the Promotion of Market Discipline in European Economic Governance ' , New Political Economy , vol. 26 , no. 1 , pp. 203-215 . https://doi.org/10.1080/13563467.2020.1729714

Title: Doing Away with the Sovereign : Neoliberalism and the Promotion of Market Discipline in European Economic Governance
Author: Ojala, Markus
Other contributor: University of Helsinki, Academic Disciplines of the Faculty of Social Sciences
Date: 2021-01-02
Language: eng
Number of pages: 13
Belongs to series: New Political Economy
ISSN: 1356-3467
DOI: https://doi.org/10.1080/13563467.2020.1729714
URI: http://hdl.handle.net/10138/327255
Abstract: This article proposes a critical reading of market discipline and its limitations as a mechanism in European economic governance. Consistent with neoliberal beliefs about market-based governance, the Economic and Monetary Union (EMU) is premised on the functioning of the government bond market as a fiscal-policy discipliner. However, the operation of market discipline requires that neither governments nor their private creditors can rely on an authority to bail them out. It, therefore, precludes the kinds of intervention by Eurozone’s supranational institutions witnessed during the euro crisis. In the post-crisis context, efforts to strengthen market discipline continue to be frustrated by the growing reliance of financial institutions on government bond markets as well as the European Central Bank’s (ECB) active participation in those markets. Having undermined the credibility of the market as an autonomous and apolitical mechanism of discipline, European economic governance struggles to come to terms with the rise of a supranational ‘economic sovereign’ in the Eurozone.
Subject: 518 Media and communications
neoliberalism
market discipline
liberal governmentality
European economic governance
Economic and Monetary Union
CENTRAL BANK
POLITICS
EUROZONE
POLITICIZATION
ORDOLIBERALISM
LIBERALISM
SCHMITT
CRISIS
HAYEK
EU
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