Playing the Market

Playing the Market: A Political Strategy for Uniting Europe, 1985–2005

Nicolas Jabko
Copyright Date: 2006
Edition: 1
Published by: Cornell University Press
Pages: 224
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  • Book Info
    Playing the Market
    Book Description:

    In the 1980s and 1990s, Nicolas Jabko suggests, the character of European integration altered radically, from slow growth to what he terms a "quiet revolution." In Playing the Market, he traces the political strategy that underlay the move from the Single Market of 1986 through the official creation of the European Union in 1992 to the coming of the euro in 1999. The official, shared language of the political forces behind this revolution was that of market reforms-yet, as Jabko notes, this was a very strange "market" revolution, one that saw the building of massive new public institutions designed to regulate economic activity, such as the Economic and Monetary Union, and deeper liberalization in economic areas unaffected by external pressure than in truly internationalized sectors of the European economy.

    What held together this remarkably diverse reform movement? Precisely because "the market" wasn't a single standard, the agenda of market reforms gained the support of a vast and heterogenous coalition. The "market" was in fact a broad palette of ideas to which different actors could appeal under different circumstances. It variously stood for a constraint on government regulations, a norm by which economic activities were (or should be) governed, a space for the active pursuit of economic growth, an excuse to discipline government policies, and a beacon for new public powers and rule-making. In chapters on financial reform, the provision of collective services, regional development and social policy, and economic and monetary union, Jabko traces how a coalition of strange bedfellows mobilized a variety of market ideas to integrate Europe.

    eISBN: 978-0-8014-6352-5
    Subjects: Political Science

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Preface
    (pp. ix-xii)
    Nicolas Jabko
  4. ONE A Quiet Revolution
    (pp. 1-9)

    The move toward greater European unity in the 1980s and 1990s is widely seen as the acceleration of an arcane process that began in the 1950s. Conventional wisdom holds that the global quest for trade liberalization and market reforms “relaunched” Europe around the single market and the euro. Market globalization and European integration thus come into view as relentless and mutually reinforcing processes. The problems facing Europe at the turn of the twenty-first century, then, stem from a political backlash against the logic of past integration. “Citizens are calling for a clear, open, effective, democratically controlled Community approach,” as European...

  5. TWO The Conundrum of Market Reforms
    (pp. 10-25)

    In the 1980s and 1990s the wind of market reforms blew over the entire world. In Europe, this global trend coincided with a visible renewal of the region’s political unification—with the launching of the single market in 1986, the official creation of the European Union in 1992, and the advent of the euro in 1999. What happened at the “institutional level” in the EU was only the tip of the iceberg. This is not to deny the importance of the changing patterns of interactions between the member states, the Commission, the European Court of Justice, the European Parliament, and...

  6. THREE The Politics of Market Ideas
    (pp. 26-41)

    The European Union’s quiet revolution was the result of a political strategy. In a specific historical context, the advocates of Europe chose the market as a central rationale for building power at the European level. They appealed to market ideas across a variety of policy areas, but on close examination these ideas were not particularly coherent. They pursued a variety of integrationist goals and used different market ideas for these different purposes. My argument, then, is primarily about political strategy as a causal factor of institutional change and only secondarily about the power of ideas. The politics of market ideas,...

  7. FOUR Strange Bedfellows
    (pp. 42-56)

    Even though national models of economic governance were subject to similar global pressures in the 1980s, the choice of “Europe” as a locus of response to market globalization was not self-evident. Behind the technical tasks of lowering trade barriers and overcoming obstacles to the free movement of capital, labor, goods, and services, the continuing progress of European unification posed the intensely political problem of changing well-entrenched national institutional structures across Europe. The promoters of Europe—a strange coalition of national and European officials, left- and right-of-center politicians, bureaucrats and business leaders—recognized that problem. They sought ways to overcome it...

  8. FIVE The Market as a Constraint
    (pp. 57-90)

    In the 1980s and 1990s, a series of financial reforms were adopted all across Western Europe. These reforms opened the gates of national finance to a host of new competitors, in two steps. In the early to mid-1980s, financial reforms were launched first at the national level in the member states that had the biggest financial marketplaces—Britain, then France, Italy, and Germany. In the mid- to late 1980s, and with gathering momentum, EU-level financial reforms pursued the reforms initiated at the national level. Lord Cockfield’s 1985 white paper Completing the Internal Market contained only a few paragraphs on the...

  9. SIX The Market as a Norm
    (pp. 91-120)

    In June 1996, the Council of Ministers unanimously adopted a legislative text calling for a gradual liberalization of electricity supply in the European Union. Behind the façade of unanimity and the moderate tone of the intergovernmental compromise, the agreement represented a major step at the end of an overdrawn and rough negotiation process—almost four years after the “1992” inauguration of the single European market, and nine years after the original proposal for an internal energy market for electricity. It set a mandatory timetable for the progressive entry of new competitors into a previously closed electricity supply industry and for...

  10. SEVEN The Market as a Space
    (pp. 121-146)

    Although the single market and the euro were certainly the European Union’s biggest achievements in the 1980s and 1990s, the European agenda was not limited to a narrowly conceived process of market liberalization and monetary unification. In that same period the European Union considerably expanded its regional development and economic assistance programs through the Structural Funds. A new policy domain was established at the EU level—EU “structural policy”—with its own objective of “economic and social cohesion” and a variety of instruments. In 1988, the European Union adopted a new six-year budget that doubled the funds available for these...

  11. EIGHT The Market as a Talisman
    (pp. 147-178)

    On January 1, 2002, a new currency, the euro, began to circulate within and across twelve member countries. As euro coins and bills entered the daily lives of millions of people, the European Union suddenly became a much more tangible reality than ever before. What the future holds for the euro and for the European Union remains to be seen, but the advent of the European Economic and Monetary Union can already be described as an enormous institutional transformation. Europe’s new currency is run by the newly created European Central Bank. Like the Commission or the Court of Justice, the...

  12. NINE The Janus-Faced European Union
    (pp. 179-188)

    The political strategy exposed in this book has run its course. By the late 1990s, the European Union’s internal market and its Economic and Monetary Union were realized or already well on track. An EU model of political economy was born, so to speak. This model is not so easy to categorize, however, since it is the legacy of an inherently complex political strategy. Although the promoters of Europe consistently appealed to “the market,” many of their motivations were “economic” in only a loose sense. The resulting EU model of political economy cannot be described simply as an international regime...

  13. References
    (pp. 189-198)
  14. Index
    (pp. 199-206)