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.

This is an open access title available under the terms of a CC BY-NC-ND 4.0 International] licence. It is free to read at Oxford Scholarship Online and offered as a free PDF download from OUP and selected open access locations.