Creditor domination in the eurozone: a republican view

Abstract

Relying on recent republican political theory, this article introduces and clarifies the concept of creditor domination and applies this concept in an analysis of the eurozone debt crisis and the EU’s response to the coronavirus pandemic. The article argues that two conditions, one institutional and one structural—related to the institutionally incomplete European monetary union and a structural transformation in international finance—conspired to render periphery member states in the eurozone vulnerable to creditor domination, to which they were manifestly subject in the eurozone debt crisis. The article also argues that the EU’s pandemic response “NextGen EU” represents a fundamental change in Europe’s politics of sovereign debt, which, even if only a temporary vehicle for debt mutualisation, has rendered member states much less vulnerable to creditor domination due to the pandemic’s economic fallout. Finally, the article discusses Richard Bellamy’s proposal for a “republican Europe of states” and argues that Bellamy’s proposed reforms, while insufficient to overcome the conditions of creditor domination in the eurozone, point to a dilemma for republicans, who may risk emancipating European citizens from creditor domination only at the cost of subjecting them to the dominating power of a weakly legitimated supranational fiscal authority.