Integration in the Time of Crisis: A historic case study on European economic integration 2010-2012

Sammanfattning: This thesis is a historical case study on the European integration between 2010-2012. The aim of the study is twofold. First it has a descriptive approach, focusing on the nature and extent of the integration. The second part is theory testing. By incorporating principal-agent theory in liberal intergovernmentalist theory and historical institutionalist theory I isolate their points on contention and limit the scope of the inquiry. By studying the relationship between the principals (Germany and France) and the agent (the ECB) in decisions of European integration I test the explanatory power of the integration theories. The materials used in this study is primarily second hand material from previous studies, as well as official documents from EU institutions and statements made to the press by policy makers. The cases for the thesis is the SMP, the EFSF, the TSCG and the ESM. The SMP is a programme launched by the ECB to secure liquidity to countries hit by the financial crisis by purchasing public debt on secondary markets. The ESFS was a temporary stability facility providing emergency loans for countries in loosing access to financial markets. The TSCG is an intergovernmental regime launched by the EMU countries to increase control and monitoring of fiscal policy within the union. The ESM is a permanent crisis mechanism, aimed at providing emergency assistance to EMU countries. The conclusion of my study is that the historical institutionalist theory provides a better explanation for the the actions of the member states and the ECB during the integration process. The ECB has successfully lobbied for increased financial constraint and control and has been granted new powers that are far removed from the common practices of central banks.