New European Banking Governance and Crisis of Democracy: Insights from the European post-socialist periphery

Abstract

In this article, we argue that the post-crisis banking governance framework of the European Union, not only severely constrains peripheral member states’ governments in their policy choices, but more profoundly rearranges their government institutions in a way to restrict sovereign banking policy formation. Furthermore, amending the most dominant narratives of the EU’s impact on national banking policy, which point either at the role of the Economic and Monetary Union, or the Banking Union, we argue that it is also and most profoundly the organization of the Single Market and the various changes made to its architecture that influence EU member states’ banking policy. Finally, and most importantly, building on the case study of the post-crisis bank restructuring in Slovenia we reinvigorate the debate on the contribution of economic policy to the crisis of democracy in the EU by demonstrating the strong effect of the European banking governance on decreasing democratic oversight of banking policy in member states.