Library Header Image
LSE Research Online LSE Library Services

A banking union of ideas? The impact of ordoliberalism and the vicious circle on the EU banking union

Schäfer, David (2016) A banking union of ideas? The impact of ordoliberalism and the vicious circle on the EU banking union. Journal of Common Market Studies, 54 (4). pp. 961-980. ISSN 0021-9886

PDF - Accepted Version
Download (415kB) | Preview
Identification Number: 10.1111/jcms.12351


The establishment of the EU banking union reveals two major shortcomings of liberal intergovernmentalism. First, it fails to explain the preference formation of the most important actor – the German government. The banking sector was divided between public and private banks, and there is no clear-cut pattern about whose interests the German government promoted. Second, material bargaining power cannot account for German concessions despite favourable power asymmetries. This article seeks to demonstrate how an ideational frame can convincingly fill these gaps. Ordoliberal ideas were constitutive for German preferences. The manipulative use of ideas as strategic resources by the German government’s opponents explains why it made significant concessions. Germany’s government publicly acknowledged that breaking the ‘vicious circle’ between banks and sovereigns was the main objective of the banking union. This became a rhetorical trap used by a coalition of Southern European member states to force the German government to make concessions.

Item Type: Article
Official URL:
Additional Information: © 2016 The Author. JCMS: Journal of Common Market Studies © 2016 John Wiley & Sons Ltd
Divisions: International Relations
Subjects: H Social Sciences > HG Finance
Sets: Departments > International Relations
Date Deposited: 04 Apr 2016 10:13
Last Modified: 20 Jan 2021 05:53

Actions (login required)

View Item View Item


Downloads per month over past year

View more statistics