Banking on Europe - Why the EU Became a Sovereign-Style Borrower and How it Should be Held to Account

The European Union's small, balanced budget is commonly considered to be one of the most important constraints on the Union's powers. However, the EU has always borrowed, and it is now borrowing on the scale of a large state to aid member states' economic recovery from the COVID-19 pandemic and to support Ukraine. This book tells the story of how the EU became a sovereign-style borrower from Jean-Monnet's 'American Loan' in 1954 to the operation of the Recovery and Resilience Facility seven decades later.

Drawing on archival analysis and elite interviews, the book charts the origins and evolution of the European Commission, the European Investment Bank, the European Bank for Reconstruction and Development, and the European Stability Mechanism as European-level borrowers and asks how these bodies' accountability to parliaments, auditors, citizens, and civil society groups can be improved. The EU's evolution as a sovereign-style borrower has been driven by a combination of gradual institutional change and hard bargaining between member states with high and low borrowing costs, we find. Since the 1990s, European-level borrowing has also been increasingly shaped by concerns over the EU's legitimacy crisis. Borrowing is not simply a technocratic issue, but one that raises fundamental questions about what sort of polity the EU is and how it could develop in the future.

1:Introduction: How the EU Came to Issue Debt on the Scale of a Large State

2:Theorizing the EU as a Sovereign-Style Borrower

3:The European Community's First Borrowing Instruments (1954-69)

4:The Rise and Fall of Commission Borrowing: From the First Oil Shock to the Maastricht Treaty

5:The Euro Crisis and New Borrowing Instruments

6:The EIB: How the EU Created the World's Largest Multilateral Lender

7:Borrowing and Third Countries

8:Borrowing Before and After the COVID-19 Pandemic

9:The Commission's Accountability as a Borrower

10:The Accountability of the EIB, EBRD, and ESM

11:Conclusion: The Future of the EU as a Sovereign-Style Borrower