Disorder, page 42
52. The hitherto unused OMT looked a hollow tool to deal with the impending crisis as it required states to be in a sovereign bailout programme and neither Italy nor Spain was. It was also subject to an ongoing legal challenge in Germany. In February 2014, the German Constitutional Court had given a preliminary decision that OMT could well exceed the ECB’s authority as well as impair the Bundestag’s constitutional budgetary responsibility and asked the European Court of Justice (ECJ) to make a judgment. Ten days before the Greek election, the ECJ’s advocate general said that with certain conditions OMT was in accordance with EU treaty law, and that without OMT the markets would continue to countenance the erroneous belief that the euro was reversible. On the German Court’s decision see Niels Petersen, ‘Karlsruhe Not Only Barks, But Finally Bites—Some Remarks on the OMT Decision of the German Constitutional Court’, German Law Journal 15, no. 2 (2014): pp. 321–7. For the incoherencies in the ECJ argument see Michael A. Wilkinson, ‘The Euro Is Irreversible!…or is it?: On OMT, Austerity and the Threat of “Grexit” ’, German Law Journal 16, no. 4 (2015): pp. 1049–72.
53. Mario Draghi, Introductory Statement to the Press Conference (with Q&A), EC, 22 January 2015, https://www.ecb.europa.eu/press/pressconf/2015/html/is150122.en.html
54. For narrative accounts of the effort to expel Greece see Spiegel International staff, ‘A Government Divided: Schäuble’s Push for Grexit Puts Merkel on the Defensive’, Spiegel International, 17 July 2015 https://www.spiegel.de/international/germany/schaeuble-pushed-for-a-grexit-and-backed-merkel-into-a-corner-a-1044259.html; Ian Traynor, ‘Three Days that Saved the Euro’, Guardian, 22 October 2015. https://www.theguardian.com/world/2015/oct/22/three-days-to-save-the-euro-greece
55. Mario Draghi, Introductory Statement to the Press Conference (with Q&A), ECB, 26 July 2018, https://www.ecb.europa.eu/press/pressconf/2018/html/ecb.is180726.en.html
56. For a longer discussion around this point see Helen Thompson, ‘How the City of London Lost at Brexit: A Historical Perspective’, Economy and Society 46, no. 2 (2017): pp. 211–28.
57. The Czech Republic did not oppose the Fiscal Compact at the December 2011 EU summit, but, in January 2012, it indicated it would not be joining. In 2019 it did join.
58. Cameron’s tactics depended on a dubious assumption that he could win a party argument on this question.
59. Blocking the other EU states using the Union institutions for a treaty outside the EU legal framework was the only leverage at Cameron’s disposal. No doubt aware that any such move would have appeared hugely disproportionate for a member state outside the euro, Cameron buckled to Merkel’s insistence that the Eurozone required stronger fiscal rules.
60. For a longer version of this argument see Helen Thompson, ‘Inevitability and Contingency: The Political Economy of Brexit’, British Journal of Politics and International Relations 19, no.3 (2017): pp. 434–49. For a not dissimilar argument from Britain’s former ambassador to the EU see Ivan Rogers, ‘Cameron’s Brexit referendum’, Lecture at Hertford College, Oxford, 24 November 2017. Published by Politico at https://www.politico.eu/article/ivan-rogers-david-cameron-speech-transcript-brexit-referendum/ On the role of the freedom of movement issue in the referendum result see Matthew Goodwin and Caitlin Milazzo, ‘Taking Back Control?’ Investigating the Role of Immigration in the 2016 Vote for Brexit’, British Journal of Politics and International Relations 19, no. 3 (2017): pp. 450–64.
61. On the hard authority of the single market for Britain see Matthias Matthijs, Craig Parsons, and Christina Toenshoff, ‘Ever Tighter Union? Brexit, Grexit, and Frustrated Differentiation in the Single Market and Eurozone’, Comparative European Politics 17, no. 2 (2019): pp. 209–30.
62. Jean-Claude Juncker, State of the Union Address 2017, 13 September 2017, https://ec.europa.eu/commission/presscorner/detail/en/SPEECH_17_3165
63. On initial French optimism about Eurozone reform see Charles Grant, ‘Macron’s Plans for the Euro’, Centre for European Reform Insight, 23 February 2018, https://www.cer.eu/insights/macrons-plans-euro
64. Emmanuel Macron, ‘Initiative on Europe’, speech at the Sorbonne, 26 September 2017, http://international.blogs.ouest-france.fr/archive/2017/09/29/macron-sorbonne-verbatim-europe-18583.html
65. On the New Hanseatic League’s emergence see ‘Gang of Eight: Euro-zone Reforms’, Economist, 8 December 2018; Christian Reiermann and Peter Müller, ‘The Sputtering German-French Motor’, Spiegel International, 11 December 2018.
66. See Adam Tooze, ‘ “Coronabonds” and Europe’s North-South Divide’, Social Europe, 13 April 2020, https://www.socialeurope.eu/corona-bonds-and-europes-north-south-divide
67. For a narrative account of her decision see Victor Mallet, Guy Chazan, and Sam Fleming, ‘The Chain of Events that Led to Germany’s Change Over Europe’s Recovery Fund’, Financial Times, 22 May 2020, https://www.ft.com/content/1d8853f4-726d-4c06-a905-ed2f37d25eee
68. ‘German ECB Ruling Should “Spur” More Eurozone Integration: Merkel’, Euractiv, 14 May 2020, https://www.euractiv.com/section/future-eu/news/german-ecb-ruling-should-spur-more-eurozone-integration-merkel/
69. As an example of the ‘Hamiltonian moment’ claims see Anatole Kaletsky, ‘Europe’s Hamiltonian Moment’, Project Syndicate, 21 May 2020, https://www.project-syndicate.org/commentary/french-german-european-recovery-plan-proposal-by-anatole-kaletsky-2020%9605?barrier=accesspaylog. For my critique of this claim see Helen Thompson, ‘Pandemic Borrowing’, International Politik Quarterly, 27 November 2020, https://ip-quarterly.com/en/pandemic-borrowing
70. ‘Germany Gains Most from Relaxed State Aid Rules’, Euractiv, 4 May 2020, https://www.euractiv.com/section/competition/news/germany-gains-most-from-relaxed-eu-state-aid-rules/
71. Wolfgang Munchau articulates this frustration in ‘How to Face Down Orban’, Eurointelligence, 21 November 2020, https://www.eurointelligence.com/column/enhanced-cooperation
72. See Eric Helleiner and Hongying Wang, ‘The Richness of Financial Nationalism—The Case of China’, Pacific Affairs 92, no. 2 (2019): pp. 211–34; Benjamin Cohen, ‘Renminbi Internationalization, a Conflict of Statecrafts’, Chatham House Research Paper, March 2017, https://www.chathamhouse.org/sites/default/files/publications/research/2017-03-20-renminbi-internationalization-statecraft-cohen.pdf. On the Chinese leadership’s views on geopolitical power and currencies see Eric Helleiner and Jonathan Kirshner, ‘The Politics of China’s International Monetary Relations’ in The Great Wall of Money: Power Politics and China’s International Monetary Relations, edited by Eric Helleiner and Jonathan Kirshner (Ithaca: Cornell University Press, 2014), pp. 1–22. On the geopolitics of currencies see Benjamin J. Cohen, Currency Statecraft: Monetary Rivalry and Geopolitical Ambition (Chicago: University of Chicago Press, 2018).
73. Zhou Xiaochuan, ‘Reform the International Monetary System’, BIS Review 41 (2009), p. 1, https://www.bis.org/review/r090402c.pdf
74. For reasons why the dollar pre-eminence was always well founded and not vulnerable to a Chinese challenge see Benjamin J. Cohen, Currency Power: Understanding Monetary Rivalry (Princeton: Princeton University Press, 2015). Eric Helleiner, The Status Quo Crisis: Global Financial Governance After the 2008 Meltdown (Oxford: Oxford University Press, 2014); Harold James, ‘The Enduring International Pre-Eminence of the Dollar’ in The Future of the Dollar, edited by Eric Helleiner and Jonathan Kirshner (Ithaca: Cornell University Press, 2009), pp. 24–44. For arguments that there was scope for a serious challenge to American power after the crash see Jonathan Kirshner, American Power After the Financial Crisis (Ithaca: Cornell University Press, 2014); Barry. Eichengreen, Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System (New York: Oxford University Press, 2011).
75. For some time prior to the crash, the Chinese leadership had toyed with such a move, but demurred from it. Helleiner and Wang, ‘The Richness of Financial Nationalism’, p. 223.
76. Benjamin J. Cohen, ‘Renminbi Internationalization, a Conflict of Statecrafts’, Chatham House Research Paper, March 2017, p. 1.
77. Cohen, ‘Renminbi Internationalization, a Conflict of Statecraft’, p. 5.
78. See Yu-wai Vic Li, ‘Hong Kong in China’s Financial Globalization: Market Power and Political Leverage’, Asian Survey 58, no. 3 (2018): pp. 439–63. On Hong Kong’s internationalized economy prior to 1997 see Michael Taylor, ‘Hong Kong’s Economy and its Global Connections: Prospects for 1997 and Beyond’ in Hong Kong’s Transitions, 1842–1997, edited by Rosemary Foot and Judith M. Brown (Basingstoke: Palgrave, 1996), pp. 166–91.
79. David C. Donald, A Financial Centre for Two Empires: Hong Kong’s Corporate, Securities and Tax Laws in its Transition from Britain to China (Cambridge: Cambridge University Press, 2014), p. 2.
80. On why renminbi internationalization could not succeed in relation to a dollar trap see Eswar S. Prasad, The Dollar Trap: How the US Dollar Tightened its Grip on Global Finance (Princeton: Princeton University Press, 2015).
81. Mark Carney, ‘The Growing Challenges for Monetary Policy in the Current International Monetary and Financial System’, speech at the Jackson Hole Symposium, 23 August 2019.
82. Trading Economics, China’s Gross External Debt, https://tradingeconomics.com/china/external-debt
83. Colby Smith, ‘China’s Currency Will Not Replace the US Dollar’, Financial Times, 19 September 2018. On the Chinese 2015–16 financial crisis see Tooze, Crashed, ch. 25.
84. Quoted in He Wei, ‘How China’s Mystery Author Called its Economic Slowdown’, FT Confidential Research, Financial Times, 25 October 2018, https://www.ft.com/content/69002a74-c52a-435a-b381-07cb5feae0d5
85. IMF World Economic Outlook Update, 22 January 2018, p. 2. https://www.imf.org/en/Publications/WEO/Issues/2018/01/11/world-economic-outlook-update-january-2018
86. IMF World Economic Outlook, October 2019: Global Manufacturing Downturn, Rising Trade Barriers, p. xiv. https://www.imf.org/en/Publications/WEO/Issues/2019/10/01/world-economic-outlook-october-2019
87. Daniel Shane, ‘Alibaba’s Debut in Hong Kong Signals Change in Beijing’s Mindset’, Financial Times, 4 December 2019, https://www.ft.com/content/5257d548-1686-11ea-8d73-6303645ac406
88. See Brad Setser, ‘Testimony Before the Senate Committee on Small Business and Entrepreneurship, Hearing on Made in China 2025 and the Future of American Industry’, 27 February 2019, https://www.govinfo.gov/content/pkg/CHRG-116shrg35699/html/CHRG-116shrg35699.htm James McBride and Andrew Chatzky, ‘Is “Made in China 2025” a Threat to Global Trade?’ Council on Foreign Relations Backgrounder, 13 May 2019, https://www.cfr.org/backgrounder/made-china-2025-threat-global-trade
89. Sophie Meunier, ‘Beggars Can’t Be Choosers: The European Crisis and Chinese Direct Investment in the European Union’, Journal of European Integration 36, no. 3 (2014): pp. 284–91.
90. Thilo Hanemann, Mikko Huotari, and Agatha Kratz, ‘Chinese FDI in Europe: 2018 Trends and Impact on New Screening Policies’, Mercator Institute for Chinese Studies, 6 March 2019, p. 8. https://merics.org/en/report/chinese-fdi-europe-2018-trends-and-impact-new-screening-policies
91. Heather A. Conley and Jonathan E. Hillman, ‘The Western Balkans with Chinese Characteristics’, Centre for Strategic International Studies, Commentary, 30 July 2019. https://www.csis.org/analysis/western-balkans-chinese-characteristics
92. Facts about German Foreign Trade, Federal Ministry for Economic Affairs and Energy. September 2019, p. 5, https://www.bmwi.de/Redaktion/EN/Publikationen/facts-about-german-foreign-trade.html
93. On the parallels between the issues created by the German and Chinese trade surpluses and how it was the German surplus issues that proved more persistent after 2008 see Guonan Ma and Robert N. McCauley, ‘Global and Euro Imbalances: China and Germany’, BIS Working Papers no. 424, 5 September 2013, https://www.bis.org/publ/work424.htm In a 2013 report, the US Treasury argued that the German trade surplus was a deflationary threat to the world economy: US Treasury Department, Report to Congress on International Economic and Exchange Rate Policies, Washington, DC: US Department of the Treasury, 30 October 2013, p. 3.
94. Laurens Cerulus, ‘How US Restrictions Drove Deutsche Telecom and Huawei Closer Together’, Politico, 8 July 2020, https://www.politico.eu/article/deutsche-telekom-huawei-us-security-measures/
95. Hanemann, Huotari, and Kratz, ‘Chinese FDI in Europe’, p. 12.
96. On the British government and the City of London’s strategic efforts to make London the centre of offshore renminbi activity see Jeremy Green, ‘The Offshore City, Chinese Finance, and British Capitalism: Geo-Economic Rebalancing under the Coalition Government’, British Journal of Politics and International Relations 20, no. 2 (2018): pp. 285–302; Jeremy Green and Julian Gruin, ‘RMB Transnationalization and the Infrastructural Power of International Financial Centres’, Review of International Political Economy, published online 13 April 2020, https://www.tandfonline.com/doi/full/10.1080/09692290.2020.1748682
97. David Cameron, ‘My Visit Can Begin a Relationship to Benefit China, Britain and the World’, Guardian, 2 December 2013, https://www.theguardian.com/commentisfree/2013/dec/02/david-cameron-my-visit-to-china
98. James Kynge, ‘China Poised to Issue Sovereign Debt in Renminbi in London’, Financial Times, 13 October 2015. https://www.ft.com/content/5ef6329c-71c9-11e5-9b9e-690fdae72044 BBC News, ‘George Osborne on UK’s “Golden Era” as China’s “Best Partner in the West” ’, 23 October 2015, https://www.bbc.co.uk/news/av/uk-34621254
99. Reuters Staff, ‘Don’t Sacrifice Hong Kong for a Banker’s Bonus, UK Tells HSBC’, Reuters, 1 July 2020, https://www.reuters.com/article/us-hongkong-protests-britain-banks-idUSKBN2425WI
100. Guy Chazan, ‘Merkel Comes Under Fire at Home for China Stance’, Financial Times, 7 July 2020, https://www.ft.com/content/bf1adef9-a681-48c0-99b8-f551e7a5b66d
101. Jakob Hanke Vele, Giorgio Leali, and Barbara Moens, ‘Germany’s Drive for EU-China Deal Draws Criticism from Other EU Countries’, Politico, 1 January 2021, https://www.politico.eu/article/germanys-drive-for-eu-china-deal-draws-criticism-from-other-eu-countries/
102. Quoted in David Dayen, ‘Corporate Rescue: How The Fed Bailed Out the Investor Class Without Spending a Cent’, The Intercept, 27 May 2020, https://theintercept.com/2020/05/27/federal-reserve-corporate-debt-coronavirus/
103. David Dayen, ‘Corporate Rescue’.
104. On the present geopolitical shock from China as part of a series that have shaped the EU’s development see Scott Lavery and David Schmid, ‘European Integration and the New Global Disorder’, Journal of Common Market Studies, published online 12 February 2021, https://doi.org/10.1111/jcms.13184
Chapter 7
1. Michael Gove, ‘The Privilege of Public Service’, Ditchley Annual Lecture, 1 July 2020, https://www.gov.uk/government/speeches/the-privilege-of-public-service-given-as-the-ditchley-annual-lecture
2. On Roosevelt’s New Deal as an archetype for democratic reform see Ira Katznelson, Fear Itself: The New Deal and the Origins of Our Times (New York: Liveright, 2013), pp. 4–7, 476–7. On the pessimism about democracy in the 1930s and 1940s including after the war’s end see Katznelson, Fear Itself, chs. 1 and 3.
3. See John Dunn, Breaking Democracy’s Spell (New Haven: Yale University Press, 2014).
4. Benedict Anderson, Imagined Communities: Reflections on the Origin and Spread of Nationalism (London: Verso, 1983).
5. There is a huge literature on the emergence of nationhood and nationalism and considerable scholarly disagreement about the historical origins of nationhood and in particular whether there were nations before the modern era. For a good review of different interpretations see Anthony Smith, Nationalism and Modernism (London: Routledge, 1998).
6. Michael Howard, ‘War and the Nation-State’, Daedalus 108, no. 4 (1979): p. 109.
7. Helmut Kohl’s Ten-Point Plan for German Unity, 28 November 1989, http://ghdi.ghi-dc.org/sub_document.cfm?document_id=223
8. On the relationship between democracy and nationhood see Margaret Canovan, ‘Democracy and Nationalism’ in Democratic Theory Today, edited by April Carter and Geoffrey Stokes (Cambridge: Polity, 2000), pp. 149–70; Bernard Yack, ‘Popular Sovereignty and Nationalism’, Political Theory 29, no. 4 (2001): pp. 517–36. For a more philosophical argument see David Miller, ‘Bounded Citizenship’ in Cosmopolitan Citizenship, edited by Kimberly Hutchings and Roland Dannreuther (London: Macmillan, 1990), pp. 60–80. For John Stuart Mill’s argument that democracy was only possible in nation states see Considerations on Representative Government (Cambridge: Cambridge University Press, 2011), ch. 16. (First published in 1861.)
9. Howard, ‘War and the Nation-state’, p. 102.
10. On this point see D. Margaret Canovan, The People (Cambridge: Polity Press, 2005), pp. 57–63.
11. Canovan, The People, p. 31.
12. The argument that constitutions based on class distinctions were incompatible with nationhood was made forcefully by the Hungarian politician and writer, József Eötvös. For a summary of Eötvös’ arguments on this point see Mervyn Jones, ‘The Political Ideas of Baron József Eötvös’, Slavonic and East European Review 48, no. 113 (1970): pp. 582–97.
13. Istvan Hont, Jealousy of Trade: International Competition and the Nation-State in Historical Perspective (Cambridge, MA: Harvard University Press, 2010), ch. 7.
14. For the argument that nationhood cannot be created without war, see Howard, ‘War and the Nation-state’, pp. 101–10.
15. Max Weber, ‘Suffrage and Democracy’ in Max Weber, Political Writings, edited by Peter Lassman and Ronald Speirs (Cambridge: Cambridge University Press, 1994), pp. 80–129.
16. Walter Scheidel, The Great Leveller: Violence and the History of Inequality from the Stone Age to the Twenty-First Century (Princeton: Princeton University Press, 2018), pp. 168–9.
17. William Saffran, ‘State, Nation, National Identity, and Citizenship: France as a Test Case’, International Political Science Review 12, no. 3 (1991): p. 222.
