Speaking to the Markets or to the People? A Discursive Institutionalist Analysis of the EU's Sovereign Debt Crisis

Research Highlights and Abstract Uses ‘discursive institutionalism’ as its analytic framework, by focusing on the wide range of EU leaders’ ideas about the crisis and how they have communicated about them. Examines the different ways in which the scholarly literature analyzes those ideas and discursive interactions, and how they lead one to consider different aspects of the crisis. Argues that there are disconnects between what EU leaders say to one another in the ‘coordinative discourse’ at the EU level and between what they say about those agreements to the markets and to the people in the ‘communicative discourse’. Suggests, with regard to the markets specifically, that EU leaders have proposed solutions that were seen as too little too late; were considered to be the wrong solutions; or raised new contingencies that the markets themselves had not anticipated. Shows, with regard to the people, that EU leaders' communication of the wrong or misleading messages meant that national publics were often not prepared for the reform initiatives taken, and that this has often left the field open to the extremes of the right and left. The EU's sovereign debt crisis is not just economic; it is also political, resulting from the failure of EU leaders to offer solutions that calm the markets and convince the people. These failures stem from problems with EU leaders' ideas about how to solve the crisis as well as their communication about them. That communication encompasses not just EU leaders talking to one another in negotiations of crisis solutions but also speaking to ‘the markets’ and to ‘the people’ about those solutions, all of which may interact in perverse ways. This article uses the analytic framework of ‘discursive institutionalism’ to consider the different forms, types, levels, rates and mechanisms of change in ideas followed by the EU leaders'discursive interactions in the ‘coordinative’ discourse and their ‘communicative discourse’ to the global markets and European publics. It uses a range of country cases, but in particular Germany and France, in illustration.