Populism and authoritarianism in the EU : what is the role of the euro?

Abstract

The article examines the impact of the euro on the political system through contrasting the experiences of eurozone countries with euro outsiders using a historical institutionalist perspective. While following the global financial crisis, many have argued that the homogeneity of rules within the Economic and Monetary Union (EMU) facilitate the rise of populist movements, authoritarian challengers have emerged only outside the eurozone. The parallel application of Rodrik’s political economy trilemma and the ordoliberal tradition of the Freiburg school to the EMU provides the theoretical background for explaining this puzzle. A mostsimilar research design based on the comparative case study of Greece and Hungary is used to uncover the causal processes through which the EMU contributes to the resilience of liberal democracy. It is shown that while the limits on economic policy autonomy strongly hinder authoritarian tendencies within the eurozone even under a populist government, being outside the EMU is a necessary though not sufficient condition for the entrenchment of authoritarian rule.