Constraints imposed by financial markets on political choice in the EU (Deliverable 8.1)

This report outlines an analytical framework through which constraints imposed by financial markets on decision-making in the European Union (EU) both at the national and at the EU level can be understood in the context of the latest economic and financial crisis. The report departs from the notion of ‘political citizenship’ as an analytical device for understanding how financial market constraints are reflected in political decisions and discusses in how far such constraints restrict or are compatible with European political citizenship rights. This aspect remains an under-studied element of EU decision-making. The report concludes that the question of in how far financial markets constrain political decision-making cannot be treated separately from understanding how financial market developments are translated into specific policy options by executive and legislative decision-makers in the context of the decentralised and multi-level economic governance architecture of the euro area. In this context a small transnational elite group of senior civil servants and central bank officials plays a particular role as they interpret financial market developments and map out policy options for elected executive and legislative decision-makers. This report is related to the bEUcitizenship report ‘Democratic parliamentary control in times of crisis’ which covers a comparative case study on four different countries which is built upon the framework advanced in this report.