Discussion Paper, Europa-Kolleg Hamburg, Institute for European Integration 3/13
This paper analyses the EU's response to the Eurozone sovereign debt crisis. It examines the background to the crisis and how the threat to the single currency taxed the decision-making capacity of the EU, while also exposing long-standing fears about an absence of democratic legitimacy. In particular, the paper reflects on the democratic credentials of the EU response, examining the important role that continues to be played by democratic politics at the national level. This role will continue to be important since this is the level at which enforcement of debt brakes will occur. In addition, the analysis highlights the political fault lines that became apparent, notably the North/South split and the separation between countries inside and outside the Eurozone. Consequently, the paper concludes that these fault lines will characterize the future of integration, thereby complicating the search for a consensus on how to complete the banking union or pursue a free trade deal with the US.