DOI link for The ESM
The ESM book
To what extent did the EU respond with further integration in response to the EZ crisis? There was a clear lack of funds in Southern Europe to stabilize banks and governments. Neofunctionalism would expect more EU institutions and resources to maintain interdependence. Liberal intergovernmentalism would expect governments to support new institutions underlining national obligations and creating package deals of mutually beneficial, but not conflicting interests. Realist institutionalism predicts a more radical restructuring of the European institutional order to better reflect great power interests. In 2011–2012, the key impetus behind change was the fiscal cliff that cut off Southern sovereigns from financial markets, coupled with bank insolvencies they could not afford to bail out. Temporary help from the Eurogroup became permanent in 2012, but focussed on reinforcing responsible sovereignty rather than instituting a fiscal union or any meaningful financial transfers. Ultimate control and the overall ordering principles were kept outside the EU legal order to protect it from legal and political tampering.