Political conflict in the reform of the Eurozone

Abstract

The negotiations on the reforms of the Economic and Monetary Union were highly conflictual. This article analyses the dimensions of conflict that structured these negotiations. Using several dimension-reduction methods, we conduct an in-depth analysis of the ‘EMU Positions’ dataset, which codes the positions of all EU member states over a broad range of fiscal, financial, economic, and institutional integration proposals. The empirical findings show that the political contestation in the reform of the Eurozone is one-dimensional between advocates of fiscal transfer and discipline. On this one-dimensional scale, we identify three broader coalitions, while Germany and France lead the two opposing groups. This conflict structure provides a setting conducive to the constant (re-)negotiation of compromises. We conclude the analysis with a discussion of several implications.