Ideational Power in the Euro Crisis

The Euro crisis presents an intriguing puzzle to political economists: why has the crisis led to reinforcement rather than undermining of neoliberal policies in European Union economic governance? Accounts have so far focused on the enduring influence of business power, and the capacity of international capital to trump the interest of citizens in dictating the terms of crisis resolution, combined with an emphasis on entrenched institutional interests of key actors, most prominently German interests. Such accounts offer valuable insights to understanding why faced with existential crisis, changes in European Union economic governance have been more gradual than fundamental. However, the paper argues that to understand supranational responses to the Euro crisis, it is necessary to combine theories of structural and institutional power with the notion of ideational power. Ideational power has shown itself not only in the capacity of centrally placed actors to persuade other actors to accept and adopt their views of what to think and/or do through the use of ideational elements (power through ideas), but also in the ability of actors to resist the inclusion of alternative ideas in the policy making arena (power over ideas), and in the privileging of certain ideas over others following their institutionalization (power in ideas).