Europe’s Economic and Monetary Union (EMU) is often described as a formation of states enjoying a shared sovereignty. Euro area Member States have bound themselves together under a single currency by means of forgoing their sovereign authority over monetary policy. An independent institution, the European Central Bank, is tasked with the monetary function, mandated to pursue a policy of inflation targeting that aims at a medium-term price level increase that is “below but close to 2%”.
To improve the stability of the entire edifice, euro Member States also commit to a set of targets regarding various economic magnitudes, including those peculiar to fiscal policy. In recent years and as a response to the [ongoing] economic crisis, the EMU rule-set has been expanded to include such instruments as the European Semester aimed at making states concurrently enforce policies that account for a comprehensive list of macroeconomic indicators covering productivity, trade balance dynamics, and fiscal solidity.
While these common commitments do provide a basis for appreciating the structures as shared, they do not—and cannot by themselves—foster a common sovereignty.
Technicalities aside, the contemporary understanding of “sovereignty” is informed by the Peace Treaty of Westphalia of 1648 C.E. Prior to that, the legitimacy of the state, the justification for its authority over a group of people, resided in the supposed divinity of the monarch or the ruling elite. The sovereign was an individual, whereas under the scope of the Westphalian tenets of statehood, the sovereign became an impersonal agency: the state, which later evolved into the nation state. The new principles of that treaty, as well as the inferences drawn from them over the passing of the ages, contributed to a system of international politics predicated on [at least] the following items concerning the substantiation of sovereignty:
- The hypostatisation of the state as the primary actor of diplomatic affairs;
- The reification of the state as the agency exercising supreme authority over a clearly delineated territory;
- The identification of the state with a given people;
- The capacity for self-determination that, when universalised, entails the principle of non-intervention in the internal affairs of another state;
- The equal status of states qua states.
To judge whether “shared sovereignty” is an accurate term, we may examine whether the EMU satisfies the criteria on that list:
- The EMU is not a primary actor in diplomatic affairs and, even if it did have a unified representation that would not necessarily entail a sovereign capacity to exercise foreign policy;
- The EMU as such, if assumed to be a sovereign state, does not properly exercise authority over a given territory, not least because it cannot maintain its own fiscal policy (issue bonds, raise taxes etc.), it lacks the right to draw its Exclusive Economic Zone, does not have its own power to use military might to defend its territory, and so on;
- The EMU does not have its own constituted people, for there still is no European demos, properly so-called, with the capacity to participate in—and to formulate—its own politics, and, furthermore, the system is predicated on a rules-based system for economic governance in the absence of a government;
- The EMU is not self-determined, as its Member States are the ones to define its sphere of influence and modalities thereof via decisions adopted by the rule forming entities (European Council and/or Eurogroup);
- The EMU is not recognised by the international community as a sovereign nation state.
By stripping the EMU of its pretences on sovereignty, we are left with a complex system of rules that apply to all Member States, which specify their shared responsibility, commitment, and interconnected liability. For sovereignty to be incorporated in this architecture, a political sphere needs to be introduced, with the two-fold objective to: (i) address all of the EMU’s shortcomings as enlisted above, and (ii) transform the EMU into a republic, operating along federal lines.
In the absence of EMU-level sovereignty, Member States hold a several and joint responsibility to commit to a standalone set of rules that is not part of a wider corpus of will-formation. A network of legal principles, against the backdrop of intergovernmental arrangements for decision-making, represents an inflexible order that can become subject to abuse. There are no credible mechanisms for the enforcement of the common objectives, while any such exercise, given the lack of sufficient EMU-level legitimacy and accountability, is akin to the annulment of national popular will.
The notion of “shared sovereignty” is not considered inaccurate due to semantic or esoteric reasons, but only because its significations contribute to the conflation between what we currently have—a quasi [con]federal system—and what we presumably denote by “sovereignty”: a polity with a single international personality, preferably a republic.