Neofunctional Approach to European Integration

Analysis of the existing debate on European integration:


The neofunctional approach seeks to explain the European integration project on the basis of the interpretation of the Eurozone crisis, which led to the transfer of new areas of policy responsibility by states to the EU. In general, neofunctional writers have focused on fiscal policy and the banking union. Schimmelfennig (2012) presents the neofunctional argument for ‘Europeanization’ as a concept that is not just limited to Europe but also can be seen as a reason for integration beyond Europe. Countries adapt to European rules and norms because of market interactions and economic incentives that come with interaction with Europe. Interaction with Europe for European Member States as well as for countries outside of Europe calls for the adaption to European rules. Schimmelfennig (2012) argues that “supranational regulation and relevant market size and dependence are generally the most important conditions of Europeanization beyond the EU. Relevant market interactions and the material, economic incentives that come with them generate the need for external actors to adapt to the rules of European governance” (p. 25). Niemann and Ioannou (2015) argue that neofunctionalism can explain many things about European integration by basing their argument on how European mechanisms have developed for responding to crisis and how this development has culminated into the more complete Economic and Monetary Union (EMU). They argue that there were some serious functional dissonances due to an incomplete EMU architecture created at Maastricht, which led to development of integrative pressures exercised by supranational institutions, transnational organised interests, and markets (Niemann & Ioannou, 2015). Epstein and Rhodes (2014) have explained the integration in the area of banking union. They argue that the biggest banks in Europe and beyond have internationalised their operations, due to which there is a preference for a centralised European regulation and supervision; more importantly, the European Commission and the European Central Bank are the two bodies that have pushed Banking Union in Europe and the European countries have integrated increasingly into this system because of functional reasons (Epstein & Rhodes, 2014).



Schimmelfennig (2015) uses an argument grounded in liberal intergovernmentalism to explain European integration. Like neofunctionalism, some of the

intergovernmentalism arguments are grounded in the explanation of the European integration in Eurozone crisis. Liberal intergovernmentalism has been used to explain the politics in Europe as a response to cope with the eurozone crisis one the basis of the way the national preferences and institutional choices were designed to commit to the currency union (Schimmelfennig, 2015). There are two key points that are made here; first, the national preferences were the result of the interdependence in the euro area and the fiscal position of states and second, that the preservation of the euro was not due to the common preferences but was motivated by divergent preferences related to adjustment costs. Therefore, there were mixed motives, which are called a ‘chicken game’ situation by Schimmelfennig (2015) because these mixed motives were driven across by hard intergovernmental bargaining. Therefore, intergovernmental negotiations produced a co-operative solution between the European states which helped avert the breakdown of the euro while the motivations remained diverse.


van Apeldoorn (2003, 2009) has done some work in the area of neo-Gramscian literature to explain European integration. van Apeldoorn (2009) argues that European integration is a compromise between neoliberalism, neo-mercantilism and other social and political projects. There is a reference to the hegemonic angle of the Gramsci explanation; however, that is not the only factor that is considered by van Apeldoorn (2009) as he also considers neoliberal arguments. There is a tension within the neo-Gramscian, particularly seen in van Apeldoorn(2009) wherein he writes about the identification of transnationally constituted national or local projects and Drahokoupil (2009) who emphasises on the factors grounded in local autonomy, which he argues gets understated in literature centred in neo-Gramscian arguments. Drahokoupil (2009) argues that there is an overemphasis on the extent that local elites are dependent on external projects. Cafruny (2015) takes a compromise position wherein he argues that there is both an impact of the transnational class as well as the domestic strategies, social settlements and political calculations that lead to the European countries’ greater integration with the European Union.

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Cafruny, A. W. (2015 ). European integration studies, European Monetary Union, and resilience of austerity in Europe: Post-mortem on a crisis foretold. Competition & Change , 19(2), 161-177.

Drahokoupil, J. (2009). After transition: Varieties of political-economic development in Eastern Europe and the former Soviet Union. Comparative European Politics, 7(2), 279-298.

Epstein, R. A., & Rhodes, M. (2014). International in life, national in death? Banking nationalism on the road to banking union. Berlin: Freie Universität Berlin.

Schimmelfennig, F. (2015). Liberal intergovernmentalism and the euro area crisis. Journal of European Public Policy, 22(2), 177-195.

Schimmelfennig, F. (2015). Europeanization beyond Europe. Living reviews in European governance, 10(1), 1-22.

Niemann, A., & Ioannou, D. (2015). European economic integration in times of crisis: a case of neofunctionalism? Journal of European Public Policy, 22(2), 196-218.

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