The European Pentagon: Executive Intergovernmentalism, New Finance and Creditor Democracies

This paper argues that the focus on the Troika and large private banks as the locus of power in the crisis management regime needs to be reconsidered. Instead, the most important vectors of political and economic power that explain the design and consequences of these reforms are to be found in overlooked international institutions, business interests and creditor-debtor relations. Specifically, power clusters around the internal dynamics of the technocracy of the European Stability Mechanism (ESM) and the Eurogroup, the interest group strategies of large European bank and non-bank financial institutions and the domestic political and judicial process of select creditor countries where international debt settlement mobilizes powerful political coalitions. The findings challenges existing approaches to the relevance of finance and national politics in the European sovereign debt crisis.