Consensus and Constraint: Ideas and Capital Mobility in European Monetary Integration

The critical foundation for European monetary integration is the neoliberal economic policy convergence that occurred across the majority of the European governments beginning in the mid‐1970s and solidifying in the 1980s. While capital mobility determines the conditions under which international monetary agreements can be sustained, political leaders’ policy ideas or shared normative and causal beliefs about monetary policy are necessary to explain whether states choose to meet those conditions. These ideational factors are critical in part because of the high degree of uncertainty over the distributional effects of exchange rate and monetary co‐operation, ambiguity which mutes both mass political debate and sectoral interest‐group activity. A template of ideational change is thus proposed to explain the path of European monetary integration.