Contrary to the claim of Hooghe and Marks that theories based on elite economic preferences and bargains and on efficiency-driven logic of regional integration ‘have become less useful guides for research on the European Union’ (2008, p. 3), I argue that national economic preferences, intergovernmental bargains as well as functional dynamics go a long way in explaining the processes and outcomes of integration in the Euro crisis.
Neofunctionalist theorizing on European integration has gone through various stages of development and comes in a number of varieties. After Ernst Haas’ initial formulation of the theory (Haas 1958), a series of reformulations and qualifications (e.g. Lindberg and Scheingold 1970; Schmitter 1970), and Haas’ sceptical assessment of the ‘obsolescence of integration theory’ (Haas 1976), neofunctionalism re-emerged in the 1990s under the heading of ‘supranationalism’ together with the dynamic growth in European integration following the internal market program and the Treaty of Maastricht (e.g. Stone Sweet and Sandholtz 1997). What unites the different versions of neofunctionalism is the idea of a dynamic and progressive integration process that transcends its intergovernmental origins as a result of endogenous interdependencies, spillovers, and path-dependencies.
I base my analysis on Paul Pierson’s historical-institutionalist model of integration dynamics (Pierson 1996). Pierson’s model starts with an initial institutional and policy outcome based on the constellation of member state preferences and bargaining power and negotiated in an intergovernmental bargaining process. This is in line with Moravcsik’s liberal intergovernmentalist explanation of European integration (Moravcsik 1998). Whereas Moravcsik stops at this point and conceives European integration as a series of intergovernmental bargains each driven by (exogenous) international interdependence and state preferences, Pierson stipulates a two-step process of endogenous change. In a first step, he argues that member states are likely to lose control of the integration processes and institutions they created due to the partial autonomy of supranational organizations, the restricted time horizons of political decision-makers, unanticipated consequences such as overload and spillover resulting from high issue density, and unexpected shifts in government preferences. In a second step, member states are unable to reassert control because of supranational actors’ resistance, institutional barriers to reform (such as veto powers or high voting thresholds), and prohibitive exit costs.4 With the possible exemption of shifts in government preferences, this account of a path-dependent integration trajectory relies completely on systemic, EU-level conditions and processes.