Emergency Politics in the Euro Crisis

Abstract

Chapter 5 starts with an analysis of the establishment and normalization of the European “bailout regime” in the Euro crisis. In 2010, member states of the Eurogroup and EU institutions devised exceptional emergency credit facilities and created the so-called troika to devise and implement harsh austerity measures in recipient states. A combination of rhetorical and institutional power advantages for the authority-holders explains why the regime was ratcheted up despite the widespread resistance of societal actors. Second, the chapter analyzes the European Central Bank’s (ECB) adoption of the role of a lender of last resort to sovereigns of the Eurozone. With the Securities Markets Programme in 2010, the ECB circumvented the monetary financing prohibition and began to intervene in the fiscal and economic policymaking of recipient states. While the Bank’s emergency measures were highly contentious, it successfully deployed arguments of necessity and functionality to stabilize and even ramp up its powers.