Money and finance are not like other commodities. As a unit of account, store of value, and medium of exchange, money serves critical social steering functions; thus it stands alongside the monopoly of coercion as a crucial element of sovereignty. The power of determining future production and consumption possibilities is also in no small measure exercised through finance. Monetary and financial relations are decisive to the nature of structural change in the EU and in world order more generally. In the words of David Calleo (2003: p. 1), international monetary relations serve ‘as a metaphor for general political economic relations in the world system’. The significance of forging a Single European Market in financial services SEMFS and the EMU is beyond dispute. However, the implications of these novel developments for European economic stability and well-being warrant serious reconsideration. The financial crisis that spread over the world in 2008 raises serious foundational questions about the validity of traditional accounts. In this chapter, we will argue that the anomalies that the financial crisis posed for understanding the nature of money and finance in the EU demand a more radical theoretical recasting. In the first section, we will review broader historical developments of money and finance in Europe and situate the institutionalization of the EMU and the SEMFS and the current crisis in this broader context.
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