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Social sources of large-scale monetary and fiscal federations: An EU-US Comparison

Applicant Georgiou Christakis
Number 196676
Funding scheme Spark
Research institution
Institution of higher education University of Geneva - GE
Main discipline Political science
Start/End 01.02.2021 - 31.01.2023
Approved amount 98'690.00
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Keywords (4)

Eurozone; Political economy; Federalism; Corporate power

Lay Summary (French)

Ce projet est une analyse historique comparée du développement des institutions de gouvernement macroéconomique (banques centrales, politiques fiscales fédérales) aux Etats-Unis durant la première moitié du XXe siècle et dans l’Union Européenne depuis une quarantaine d’années.
Lay summary
Le principal objectif de ce projet est d’interroger les liens entre échelle de l’activité économique et développement politique / construction étatique sous le capitalisme.

Un objectif directement lié est d’interroger les sources du développement des fédérations contemporaines afin de soutenir que les sources socio-économiques constituent une variable bien plus importante que ce que la littérature sur le fédéralisme a théorisé jusqu’ici. Cette littérature identifie les impératifs de sécurité externe comme le principal facteur de constitution des fédérations. Mon objectif est de démontrer que d’une part, les fédérations ont leur propre histoire et évolution qui doit être autant prise en compte que leur avènement, et d’autre part, que les variables socio-économiques (en particulier, les impératifs qui découlent du développement du capitalisme) pèsent plus lourd que les variables de sécurité externe dans ce processus.

Un troisième objectif est de contribuer à l’analyse de l’émergence du programme New Generation EU. La spécificité de ce projet sera d’examiner la contribution des grandes entreprises européennes dans la formulation de ce programme.

Le contexte scientifique est constitué par les débats suscités par la crise de la zone euro de 2010-12 et le débat sur la nécessité pour la zone euro de se doter d’un budget substantiel. Le contexte sociétal est constitué par la crise économique majeure de 2020 et le débat majeur qui a traversé l’Union européenne sur la réponse fiscale à apporter à cette crise.

Direct link to Lay Summary Last update: 12.12.2020

Responsible applicant and co-applicants



The scholarly debate on the Eurozone is multi-faceted and of huge proportions. However, one neglected area of study has recently received some additional attention, namely the comparison between the history of the United States’ federal macroeconomic institutions and the Eurozone. Scholars have looked at that particular history in an attempt to draw policy lessons for the future of the Eurozone - and policymakers have even asked them to do so. They have asked questions about the pace and the conditions under which the United States developed federal macroeconomic institutions (a federal central bank and fiscal federalism institutions), the changes in the US constitutional order that this required and the economic efficiency of the institutions created.The question they have largely failed to ask however is that of the social sources of these institutional innovations. What were the structural transformations in US economy, society and polity that drove the creation and subsequent evolution of a federal central bank and institutions of fiscal federalism? Are these social sources and structural transformations in any way comparable to what has been happening in Europe over the last fifty years of European integration? If so, what does this mean for the future development of the Eurozone?This project seeks to provide answers to these questions through a comparative study of the role played by American corporations during the first half of the 20th century and that played by their European peers since 1978 in the setting up and evolution of federal macroeconomic institutions in their respective federal polities. As such, it is a comparative analysis of the social sources of macroeconomic federalism in the US and the Eurozone.The project builds on work already carried out on the involvement of corporations in the Eurozone crisis. Theoretically, it is informed by a framework for analysing the evolution of the EU’s political economy, which I refer to as the “corporate reconstruction theory of European capitalism(s)”. This body of work argues that the creation and subsequent development of the Eurozone, including the handling of the 2008-12 crisis, has been driven by the preferences (and action) of Europeanised corporations and the functional requirements of building a pan-European political economy congenial to the smooth functioning of an European corporate capitalism. This points to the conclusion that the social sources of the development of the Eurozone as a monetary and fiscal federation lie in the corporate transformation of European capitalism. The working hypothesis is that this dynamic is, in its essence, comparable to the political-economic history of the USA in the first half of the 20th century.The project entails two research activities. First, fieldwork in Europe based on interviews with public officials and corporate leaders. The aim is to establish how corporations and their leaders see the Eurozone’s future, what concrete steps they are taking to advance their reform agenda and the extent to which these steps are influencing the reform process underway. Second, the project entails the assimilation of the literature pertaining to the case of the United States. Initial bibliographical research has yielded a very large number of works from various disciplines (history, sociology, political science) that deal with corporate involvement in the creation of the Federal Reserve System and the US’s fiscal federalism institutions. This literature now needs to be closely read and mastered.The project’s result will be to assemble material for at least three journal articles. One will deal closely with the issue of central banking and financial stability, another with fiscal matters and a third will provide a synthesis by integrating the various case studies in a single narrative of how federal macroeconomic institutions emerged in the United States and Europe. The long-term aim is a book with a detailed comparison of the US and the Eurozone.