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Money, Law, Sovereignty:

Where does this crisis leave the state?

Nigel Dodd

LSE

Stockholm SGIR Conference, September 2010

Abstract

The paper deals with ‘Phase II’ of the financial crisis. Although it is usually described as a sovereign

debt crisis, the problem is indebtedness in general, and the fundamental imbalances this reveals in

the euro zone, mainly between Germany and the other member states. Nevertheless, the crisis does

raise some profound questions about the nature of sovereignty in the euro zone, which I examine in

this paper by discussing the ramifications of Wolfgang Schäuble’s statement that euro zone states

should ‘on principle’ be allowed to go bankrupt. Drawing first on Agamben, I argue that the euro

zone imposes specific conditions on state bankruptcy and/or default, undermining two forms of

‘immunity’ (monetary and legal) that would normally apply to independent states. This relates to a

deeper, structural and sociological, problem with the nature of sovereignty within the euro zone,

which I explain using Balibar’s discussion of popular sovereignty and the ‘fiscus,’ i.e. the state’s

management of money. While most analyses of the euro point to the division between monetary

and political integration that the project represents, I argue that the ‘fiscus’ itself is divided within

the euro zone, along a fault line that is being revealed to us now. This is the fault line between

money and finance, which I examine, first, by drawing on the work of international political

economists, Strange and Wolf, and second, by reflecting on Bataille’s analysis of the Marshall Plan

and Bretton Woods, and the distinction between restricted and general economy by which that

analysis is framed. The conclusion of the paper is that the logical solution to the euro zone is neitherits break-up nor its reduction to a smaller core, but rather its radical reconfiguration: unify the

‘fiscus’, which means a Eurobond, fiscal coordination and treatment of its unabsorbed surplus as

condemned wealth.



Money, Law, Sovereignty:

Where does this crisis leave the state?

Countries don’t go out of business.

(Walter Wriston)

It must, on principle, still be possible for a state to go bankrupt.(Wolfgang Schäuble)

Introduction1

Following the bankruptcy of Lehman’s in September 2008, the rescue of several other banks, and

the measures taken by governments to restore confidence in the credit markets, the crisis has moved

into a new phase focused on sovereign debt. In the euro zone, where the crisis has been unfolding

since late 2009 [see Appendix 1: Timeline ], the nature of this crisis is mainly expressed by thelarge deficits of specific member states (the PIIGS). These deficits are implicated in feedback

mechanisms between public finances, private debt and the banking system, which could ultimately

undermine the euro zone as a whole. States ran into debt problems not directly because of the costs

of bailout but because of the recession that was triggered by the credit squeeze the banking crisis

caused. Now it is working the other way. States fund their debt through taxation (revenues are in

decline) and bonds (Greek bonds have been downgraded to junk status; yield have opened up

between member states [see below]; central banks have been purchasing bonds to sustain the

market; and CDS spreads have been occasionally very high). Banks more generally have been wary

of one another again, with LIBOR rising and, in Europe, overnight deposits with the ECB reaching

record levels. This is a more general, ‘systemic’ feedback loop: all parties come under a degree of

suspicion during a crisis, and all are subjected to more stringent standards than might otherwise

apply.2

Discussion of the euro crisis has concentrated on public finances in the PIIGS countries: it is a

‘sovereign debt’ crisis, we are often told [See chart: Debt ]. This is partly true of course: Portugal

has budget deficit of 9.4% and sovereign debt ratio of 77% of GDP; Ireland has a budget deficit of

14.3%; sovereign debt ratio of 64% of GDP; Italy’s budget deficit is 5.3% with a sovereign debt

ratio of 116% of GDP; the budget deficit of Greece: is 12.7% with a sovereign debt ratio of 115%;

and Spain’s budget deficit is 11.2%, with a sovereign debt ratio of 53% of GDP.

2

1 My thanks go to Johannes Lenhard for his work on data gathering for this paper, his preparation of charts, and hisincisive comments. Thanks to Gwynne Hawkins, too, for our long-standing conversation about theory, particularlyBataille, and to Patrik Aspers, for his comments on a draft.

2 ‘Due to a lack of transparency on banks’ sovereign debt exposures, concerns about counterparty credit risk [has] led todislocations in core funding markets’, Bank of England’s Financial Stability Report , June 2010, p. 35.



These numbers need context. The crisis in Greece are exacerbated by its low growth prospects, and

by doubts about the capacity of an inefficient taxation system to pay off the public debt. Spain’s

prospects are damaged by high unemployment (18%) and high levels of private debt (see below).

Ireland, too, has high private debt, while Italy’s difficulties - labour market rigidities and defective

regulation, for example - are long-standing and not specific to this particular crisis.

The crisis in the euro zone was not ‘caused’ by public debt, even though the current debate leaves

exactly this impression. Prior to the banking crisis, those states now facing problems - PIIGS - were

not especially ‘irresponsible’ in public debt terms. What was rising in those countries was private

debt, particularly household debt. During the period between 1997 and 2008 we saw the following

trends: the household debt/income ratio in Italy rose from 25 to 57%; in Spain from 70% to 128%;

in Ireland from 170% to 197%; and in Portugal from 60% to 135%. Germany’s ratio during the

same period fell from 97% to 89%. Spain presents a particularly clear example of the ‘mix’ of

private and public debt that the crisis involves [see chart: Spain ]. Its sovereign debt ratio (53%) is

lower than that of Germany (73%), and has been for some time. Spain’s difficulties stem from the

build-up of private household debt that accompanied its rampant housing market and poorly

regulated Caja banks. The 1997-2008 rise in house prices in Spain - 120% during the past ten years

- was the highest in the eurozone and the third highest of all EU countries.

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The crisis in the euro zone is connected to indebtedness in general , not just sovereign debt, and to

serious economic imbalances. All member states with the exception of Germany are confronting a

current account deficit (10.06% of GDP in Portugal in Q4 2009; 2.94% in Ireland; 3.37% in Italy;

11.22% in Greece; 5.06% in Spain - as against a German surplus of 4.8% of GDP). On almost

every economic indicator, Germany stands out among the member states as being against the trend.

The fact that the finance minister of this country has been arguing for the ‘orderly insolvency’ of

others, such as Greece, therefore raises far-reaching questions about the original aims of Europeanmonetary integration, the development of the euro zone over the past decade, and more specifically,

the issue of sovereign debt and bankruptcy within the zone as it is now constituted.

In this paper I ask a simple question: ‘Where does this crisis leave the state?’ This is a matter of two

aspects of sovereignty, money and law. I also want to ask a second question: ‘Where does this crisis

leave the people?’. This is the sociological question. I will talk about sovereignty in relation to the

issue of bankruptcy, drawing on the work of Agamben (economic crisis as a state of exception ) and

Balibar (the idea of Europe and the concept of fiscus ). In grappling with the sovereign debt crisis in

the euro zone, I will introduce a distinction between money and finance which comes from work on

international political economy (Susan Strange and Martin Wolf), and in Bataille’s remarks onBretton Woods and the Marshall plan. My paper is exploratory and question-begging. The issues it

raises bear both on theory (what is money, how is it managed, what are its links with society and the

state, etc.) and practice (what caused the financial crisis, what should governments do now, how can

the euro be saved, should it be disbanded, etc.).

A Can states go bust?

In order to address issues raised by bankruptcy in the eurozone, we need to investigate the concept

of bankruptcy itself, and its relevance not only where different legal jurisdictions are involved, but

where the bankrupt agent is a sovereign state. This latter question has profound implications for our

understanding of sovereignty. In developing this part of the discussion, I want to draw particularly

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on: Agamben (this section), whose interpretation of Schmitt’s concept of the ‘state of exception’

seems particularly relevant for grasping some of the issues raised by the notion of sovereign

immunity - mainly in the legal sense - in relation to bankruptcy, and poses the question ‘where does

this crisis leave the state?’; and Balibar (next section), whose use of Jean Bodin’s description of the

difference between absolute and popular sovereignty, and the crucial role played by the notion of

fiscus in relation to this distinction, is relevant for tackling the idea of immunity mainly in themonetary sense, and raises the question, ‘where does this crisis leave the people?’.

In Means Without End (1996), Agamben states that ‘ those who have any lucidity left in them know

that the crisis is always in process and that it constitutes the internal motor of capitalism in its

present phase, much as the state of exception is today the normal structure of political power’ (133).

The analogy - between economic crisis and the state of exception - is intriguing. There are linguistic

resonances if we interpret the state of exception as a state of emergency. In Britain, the ‘austerity

budget’ that was delivered on 22 June 2010 was justified by referring to the prevailing economic

‘emergency’; there have been two ‘emergency’ budgets in Ireland in the space of 6 months; and the

language of economic ‘emergency’ has been used in California’s debt crisis as well as in relation to

the loan package prepared in Europe to tackle the problem in Greece. As Agamben writes: ‘Nothing

is more nauseating than the impudence with which those who have turned money into their only

raison d’être periodically wave around the scarecrow of economic crisis: the rich nowadays wear

plain rags so as to warn the poor that sacrifices will be necessary for everybody’ (133). The language of

‘emergency’ and ‘exception’ is crucial here. Although it seems unlikely Agamben had this in mind,

the analogy between ‘state of exception’ and ‘economic crisis’ might also apply to the question of

sovereign immunity of the bankrupt state: the state of ‘exception’ is the state’s position above the law (cf.

Schäuble!).

So what is state bankruptcy - does it have any meaning at all? On what terms, if any, can a state be

declared bankrupt?

Schäuble refers to the need to impose ‘discipline’ on member states. This task would be enacted

through denial of voting rights and, ultimately, exit: ‘A country whose finances are in disarray must

not be allowed to participate in decisions regarding the finances of another euro member. Should a

eurozone member ultimately find itself unable to consolidate its budgets or restore its

competitiveness, this country should, as a last resort, exit the monetary union while being able to

remain a member of the EU.’3 He invokes issues of legality: ‘The voting rights of a eurozone

member should furthermore be suspended for one year if infringement proceedings establish that

this country intentionally breached European economic and monetary law.’ What might this law

be? Perhaps Maastricht’s Stability and Growth Pact. As far as I am aware there is no other

‘European’ law that is relevant to bankruptcy.

Citibank Chairman Walter Wriston (1919-2005) famously said that countries cannot go bankrupt:

‘Countries don’t go out of business - the infrastructure doesn’t go away, the productivity of the

5

3 Schäuble argues that Greece should enter a period of ‘orderly’ insolvency, i.e. planned restructuring. Restructuringserves creditors well: the face value of the debt is often retained, for example. From the perspective of the debtor state,interest rates are kept at manageable levels as repayment terms are extended.



people doesn’t go away, the natural resources don’t go away. And so their assets always exceed their

liabilities, which is the technical reason for bankruptcy. And that’s very different from a company.’4

Who is right - Schäuble or Wriston?

In order to answer we need a clearer picture of how public (government) debt breaks down: who the

creditors are, the l egal jurisdiction in which the debt contract is made, and the cur rency in which the debt

is denominated. First, we need to distinguish between external debt and domestic debt: the criteria

include where the creditor is based, who defines the terms of the contract and under whose

jurisdiction, and the currency denomination of the debt. Here I follow Reinhart & Rogoff ’s

excellent history of the linkages between financial crises and sovereign debt crises, This Time is

Different (2009). Their definitions are:

a. government domestic debt : ‘debt liabilities of a government that are issued under and subject

to national jurisdiction, regardless of the nationality of the creditor or the currency

denomination of the debt; therefore, it includes government foreign-currency domesticdebt, as defined below. The terms of the debt contracts can be determined by the

market or set unilaterally by the government’ (9);

b. government foreign-currency domestic debt : ‘Debt liabilities of a government issued under

national jurisdiction that are nonetheless expressed in (or linked to) a currency different

from the national currency of the country’ (9). This third category is a hybrid: domestic

law, foreign currency;5 and

c. external debt : ‘total debt liabilities of a country with foreign creditors, both official (public)

and private. Creditors often determine all the terms of the debt contracts, which arenormally subject to the jurisdiction of the foreign creditors or to international law (for

multilateral credits)’ (9).

A second and overlapping distinction concerns the medium in which government debts are held:

d. Domestic currency debt consists mainly of government bonds, i.e. bonds issued by a national

government in its own currency. These are also known as ‘risk-free’ bonds, a label

premised on the idea that a government can monetise its debts (this option is not open to

member states of the euro zone independently); and

6

4 Cited in ‘Money Matters: An IMF Exhibit - The Importance of Global Cooperation: Debt and Transition(1981-1989)’, see http://www.imf.org/external/np/exr/center/mm/eng/mm_dt_01.htm. Also cited in Buckley,

Emerging Markets Debt , p. 14

5 Reinhart and Rogoff complete the picture with 2 further categories: a) total government debt (or total public debt): ‘totaldebt liabilities of a government with both domestic and foreign creditors. The “government” normally comprises thecentral administration, provincial government, federal governments, and all other entities that borrow with an explicitgovernment guarantee’ (9). [so this is external debt + government domestic debt]; and b) central bank debt : ‘Not usuallyincluded under government debt, despite the fact that it usually carries an implicit government guarantee. Cetral banksusually issue such debt to facilitate open market operations (including sterlilised intervention). Such debts may bedenominated in either local or foreign currency’ (9).

http://www.imf.org/external/np/exr/center/mm/eng/mm_dt_01.htm







! if the currency is domestic, this means in principle that the debt can be monetised: this

also gives the state immunity from certain kinds of risk (currency mismatch, for

example).

! if the legal jurisdiction is domestic, this means that the state potentially has immunity from

prosecution by creditors.7 (In the Greek case 95% of the debt was issued domestically.)

The euro complicates this picture because there is a recognised politico-legal structure, as well as a

monetary apparatus, above nation-state level . The first reason does not apply to Greece because it is

part of the euro. As for the second reason, which would ‘normally’ apply to Greece, Schäuble is

invoking European economic and monetary law. Greece faces the threat of exclusion from the

eurozone, an outcome not envisaged in conventional analyses of sovereign bankruptcy. The issue of

sovereign bankruptcy therefore has a particular (and possibly unique) meaning within the euro zone

- as does the issue of sovereignty itself. This takes us to a slightly different, and broader, question:

‘where does this crisis leave the people?’ I turn to this now by drawing on the arguments of Balibar.

B Fiscus

In We, The People of Europe? (2004), Balibar uses Bodin’s Six Books of the Republic (1576) to theorise the

distinction between absolute and popular sovereignty. The aspect of his account that is of interest to

us is where Bodin refers to two ‘limitations’ of sovereignty. A limitation is an ‘outside’ of sovereignty,

according to Balibar it is ‘where the absoluteness of its power comes to an end’, p. 145). By Bodin’s

reckoning, it does so by virtue of religion and money. About the question of money, Balibar picks up

the old name for the administration of finances, the fiscus.8 This refers to questions of who

monopolises the coinage, who can be taxed, how much, and so on. As Balibar sees it, the question of

the fiscus (who controls money and finance?) alongside the question of religion (who controls

manifestations of religious belief?), define the limit-edge of sovereignty.

The sovereign asserts that the right of coinage ( nummus ) just as he asserts the right of law ( nomos )

(Bodin, 1992: 78).9 Just as there cannot be private law, there cannot be private money. However,

taxes are a ‘delicate’ matter: the idea of the sovereign having to seek ‘consent’ to the levying of new

taxes is a clear limitation on sovereignty. Bodin invokes what Balibar calls a ‘prudential’ rule, i.e. that

‘taxes imposed on the people against their will either are never collected or cause revolts capable of

endangering the state itself ’ (146). As a consequence, fiscus affects the whole of sovereignty, piece by

piece: it ‘forms a totality in which monetary policy and tax policy must balance, and because themastery of finances is the condition of the autonomy of the political in all other domains (just as the

mastery of beliefs is the condition of obedience to power and to the law in general’ (146).

8

7 In cases such as Pakistan and Ukraine in 1999 and Uruguay in 2002, where ‘orderly restructurings’ took place, most ofthe debt was issued in London and New York, and when foreign jurisdictions are involved there is always a risk of hold-outs (creditors refusing terms) and litigation because the state debtor has only limited sovereign immunity in foreigncourts (see Roubini, ‘Greece’s best option is an orderly default’, FT , 28 June 2010).

8 Latin for ‘basket,’ the fiscus was the Treasury of the Roman emperor, so-called because the money was stored inbaskets.

9 ‘Indeed, after law itself,’ Bodin writes, ‘there is nothing of greater consequence than the title, value, and measure ofcoins’ (p. 78).



As far as absolute sovereignty is concerned, money is one of its fundamental limits - not its

foundation: ‘sovereignty will only be truly absolute if, by regular means (thinkable as the

development of its on order, and thus excluding dictatorship or the state of exception), it manages

to interiorise its own limits, that is, to incorporate in the field of the political what at first seemed to

escape it, showing the persistence of a remainder: the regulation of beliefs (whose type is constituted

by religious faith and its intellectual, moral, and cultural continuations) and the regulation ofeconomic processes by way of the fiscus (monetary and fiscal policy, unified by taxation and the

public debt)’ (147).

What, then, of popular sovereignty? This is Balibar’s ‘perilous leap,’ when sovereignty ‘passes from a

princely to a popular form, that is, to emerge as truly state sovereignty’ (145). The argument is

complex, but especially interesting where he maintains that the two fundamental limitations of

absolute sovereignty - religion or Bildung (nowadays: culture - ‘morality and education’ have ‘taken

over from religion,’ he says on p. 152) and money or fiscus (or crucially: finance - see below for the

distinction between them) - are sites on which civil society and state co-determine each other:

! regarding Bildung , this is a question of ‘finding forms of cultural communication within

the people’;

! regarding fiscus, this is ‘the sense in which mastery of public finances allows the tendency

towards “savage” capitalism to be checked, at least in internal space, by a combination

of monetary and social policies’ (152-3). A little further on he describes this function as

providing ‘forms of social mediation of class antagonisms that are not pure show’ (153).

The theoretical context of Balibar’s discussion is a particular understanding of European

integration as a conjuncture in which borders are key. The danger, he argued a decade ago, is that

the EU would contribute to the formation of a kind of apartheid. For example, by defining

European ‘nationals’ (versus ‘immigrants’) more strictly than had been the case hitherto, the

Maastricht Treaty created ‘a new discrimination that did not exist within each national space’ (p.

44). The euro has added an economic dimension to this - reinforcing, mediating and transgressing

the boundaries of which Balibar speaks.

The euro has subdivided the EU, between core and periphery. But this is not a simple division between

where the euro circulates and where it does not: 20-25% of euros circulate outside the eurozone;10

in Montenegro and Kosovo (both EU), Mayotte, Saint Pierre and Miquelon and Akrotiri andDhekelia (all non-EU) the euro is the sole currency. Membership is a question of rights and

representation, of having a vote on the board of the ECB for example. It is also, as we shall see, a

question of possible redistribution.

The euro has created its own economic marginals, i.e. states that did not qualify for membership according

to a set of rules (the Maastricht convergence criteria) that were contested and negotiable and that

have been ‘broken’ several times since then - new members, potential members, and perhaps soon,

ex members. Ten years ago, Greece was the most marginal case on entry, allegedly requiring the

accountants’ sleight of hand to be included in the original euro grouping, slightly late but before the

9

10 Source: E-mail communication, ECB Statistics Information Services, 13 July 2010.



introduction of notes and coins, in 2000. It is ironic now that similar accounting ‘tricks’ are being

blamed now as the Greek government is accused of covering up its fiscal difficulties.

The euro has created its own monetary borders, i.e. zones of indeterminacy where money flows beyond the

reaches of the fiscus - beyond tax and regulation - and the state that prohibits drugs, sex trafficking,

and so on. Money - like language, perhaps - flows into border zones, where it is more difficult to

exclude, and indeed it may help lubricate the flow of people and goods beneath and around the

fiscal state.11 When the finance minister of the euro’s core state - its major surplus state - argues that

another state ought to be able to go bankrupt, he implies that bankruptcy as a necessary

precondition for withdrawal of a state from the eurozone. This would mean its downgrade from

core to periphery, to marginal status - its relegation to the economic hinterland of the euro zone, but

not the EU. An extreme version of this interpretation would be to imagine euro membership as a

revolving door, granted and withdrawn according to regular measures of good behaviour - this is

not something that was ever envisaged, not anything that could remotely work. Schäuble surely did

not mean this - but his logic implied it.

In narrow terms, the euro has a threefold significance for what Balibar has to say. First, it is often

pointed out that the entailed monetary integration without any other kind of integration - cultural

or political, for example. This would be something like an integration of fiscus but not of Bildung . But

as I am about to suggest, the euro actually divided the fiscus, and we are seeing the consequences of

this. Second, it is interesting to find that the euro zone - where, precisely, issues of sovereignty have

been placed in question for more than a decade - is the site on which we are now witnessing Phase 2

of the banking crisis, a crisis that is being referred to as a ‘sovereign’ debt crisis. Is this an accurate

description of the euro zone crisis? And third, Balibar’s ‘Keynesian’ interpretation of popular

sovereignty involves - in the economic field - the principle of generating ‘fiscal’ institutions that canmediate the relationship between state and civil society. These are institutions he describes as, first,

protecting society internally from the savagery of capitalism from outside, and second, mediating

society’s class antagonisms. Are these aspects of the euro breaking down now - or were they never

properly achieved?

The fundamental difficulty in the euro zone, as I argue in the next section, is not simply that the

fiscus has been disintegrating, but that it has always been divided. Most debates about the euro

interpret this as a question about fiscal integration. I want to point to another side of the issue, which

concerns financial integration. In order to investigate this, we need to distinguish between money and

finance.

C Finance

In his regular columns in the FT and in his book, Fixing Global Finance (2010), Martin Wolf makes a

rigorous case that from the perspective of the state, there in an important monetary dimension to the

series of financial crises we have witnessed during the past two decades: from emerging markets,

South American and other sovereign defaults, through to the current crisis. The problems are

10

11 Cash has a strong role here, and recalls a question that was asked in 2002: why the 500 euro note? This largedenomination is helpful for money laundering, drugs and people trafficking, but useless for buying a cup of coffee inPiazza Navona. As a Europol memorandum put it at the time, the large note could ‘facilitate cash border transportation’http://www.thefreelibrary.com/EUROPOL+interpol+anti-money+laundering+work+feature.-a0225436908.

http://www.thefreelibrary.com/EUROPOL+interpol+anti-money+laundering+work+feature.-a0225436908





always worse, according to Wolf, when countries borrow in foreign currency. ‘Foreign-currency debt

is dangerous,’ he writes, ‘and short-term foreign-currency debt, given the risks of “sudden stops” (or

more precisely a sudden bout of market illiquidity), most dangerous of all’ (171). It is less risky for a

government to borrow in its own currency: both from the perspective of the borrower (avoiding

shocks from currency mismatches) and lender, ‘since countries usually find it particularly difficult to

default outright to their own citizens’ (186).

Wolf suggests that the ideal solution to the issues currently confronting the global financial system

would probably be to unify money. e.g. via a currency basket system, a return to the gold standard,

or the creation of a global monetary union along similar lines to the euro. But he concludes that

‘flexible exchange rates and fiat money are here to stay.’ therefore global finance ‘will continue to

operate in a very different monetary context from that of the late nineteenth and early twentieth

centuries’ (184). The central thesis of Wolf ’s proposals to ‘fix’ global finance is thus to establish a

system of domestic-currency-denominated debt , ‘whether it is a free float, a managed float, fairly tight

pegging to a specific anchor, loose pegging against such an anchor, or pegging against a currency

basket, and whether the currency regime is national or regional, it is essential to develop a vibrant

domestic financial system in which large-scale borrowing is possible in the domestic currency at long

maturities and moderate interest rates’ (182).

Although he does not cite her, Wolf ’s argument recalls a distinction drawn by Susan Strange some

years ago, between the global financial system and the international monetary system. She describes

the former as ‘a whole system of creating, buying and selling credit money that in recent decades as

developed somewhat independently of governments’ (1994: 49). Strange’s analysis is rooted in the

post-Bretton Woods era, when it was clear that the globalisation of banking and finance had made it

almost impossible for states to collectively manage an exchange rate system. Wolf is returning to thetheme. His analysis is based on the argument that from a monetary perspective we are in a new

phase of globalisation. The first globalisation era (1870-1914) was the gold standard era, whereas

now we have adjustable exchange rates. In this currency regime ‘the only safe way to borrow is in

one’s own currency. If that is impossible, borrowing must be limited’ (172).

The euro presents an exceptional case. The Bretton Woods system was a regime of fixed exchange

rates, while the present-day system Wolf discusses consists of floating rates. The euro is different: a

unified ‘domestic’ currency, with several countries borrowing in it. This did not appear to matter in

the early years. Consider the following statement by Aglietta and Scialom, written in 2004:

Government bonds have been converted into Euros since the first day of EMU ... The process has included

outstanding debt as well as new issues. By the second half of 1998, interest rates of the same maturity bonds had

already converged, with very low spreads. This was an indication that the market was unconcerned about the

sustainability and solvency of government debt in participating countries. German bonds provided the

benchmark because their market was deeper and broader ... It is as if a single yield curve has been established.

(52)12

11

12 Aglietta and Scialom say that German bonds provided the ‘benchmark’. They should have said: countries couldborrow ‘as if ’ they were Germany! This is a form of ‘transfer union’ that is difficult to measure but impossible todispute: euro zone member states benefited from easier credit conditions - through the bond markets and filteringthrough into private corporate and household debt - by virtue of their membership of the euro. This was reflected notonly in lower interest rates but, in Ireland for example, the ability to borrow at larger multiples of income.



That singular yield curve looks somewhat different in 2010. Now, more clearly than ever, the euro

zone is divided, financially, into distinctive bond markets and tax regimes. This was never a single

yield curve but rather a line whose thickness is testimony to the independent threads that make it up

[see charts: Bond Yields ].

This thickness, just as much as the divergence we are witnessing now, expresses precisely that tension

between a currency regime on the one hand, and a financial system on the other, that both Strange and

Wolf refer to. This adds texture to Schäuble’s argument. A single currency, shared by several states,

any one of whom ought to be allowed to go bankrupt. One currency, sixteen debtors.

Wolf ’s proposal for a domestic-currency-based financial system runs into some interesting questionswhen it comes to the euro. It is one thing for a state to borrow in its own currency. As Wolf says, this

creates specific obligations and offers several options. This relates to fiscus, and was the point of the

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discussion of Balibar above. And yet in the euro zone, this cannot apply. Normally, as the earlier

discussion of Agamben suggests, a country borrowing in domestic currency is immune from

bankruptcy and has further options to soften the burden of debt through its monetization. Not in the

euro zone. Here, as I have said, a state cannot directly monetise, it has no power to do this

independently. But if Schäuble has his way, euro member states should be ‘allowed’ to go bankrupt.

By this he essentially means ‘orderly insolvency.’ It as if states undergo the same rigorous re-partitioning as, in Balibar’s theory, people do - only in this instance, the distinction is between solvency and insolvency.

Yet for all the political rhetoric about bankruptcy, strenuous steps are being taken to support the euro

zone’s struggling states [see chart: Transfer to Greece ], most recently through the stabilisation

fund [see chart: Stabilisation fund ]

There is a growing critical consensus towards the euro in Germany that the project is failing: it has

become a ‘transfer union’, and is therefore failing as a monetary union. This reflects the view that

Germany, as the largest net contributor to the EU, has spent the past ten years subsidising weaker

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member states, such as Spain, Portugal and Greece [see chart: Net Contributions to the EU ]. So

what is the logic of this argument, and how does it compare to the views of Wolf and Strange about

tensions between money and finance? I want to argue that something slightly different is going on

with the euro.

Wolf and Strange are fundamentally concerned with tensions between national currency regimes and

global finance, and how risks that arise on the interface between them are borne and can be

exacerbated by exchange rate shocks, or currency mismatches. The transfer argument is different,

suggesting that the euro was always meant to be a currency area not an aid programme. This is an

argument about debt and redistribution, not globalisation. The argument against seeing the euro as

a transfer union is that it is one thing to pool money as a technology, but not as a resource. It is an

interesting argument because it contradicts what has always happened in the EU in general and,

more recently, the euro zone itself. I will look at this in more detail now.

D Transfer Union

The description ‘transfer union’ has been used to describe the ECB’s role as a ‘miniature IMF’ (see

for example ‘European Central Bank: A bolder banker’, FT 7 July 2010). The term is widely used in

Germany by critics of government policy towards the euro. The term was also used by Columbia’sEconomics Professor, Jagdish Bhagwati, in an interview with Frankfurter Allgemeine Zeitung 20

June 2010. ‘It is possible that the monetary union turns into a transfer union. If the weak countries

have problems and everyone gets worried about the Euro, the question rapidly becomes political. It

is in the end not good for Europe if countries such as Greece default. There will therefore be a

transfer of money in such situations - to a certain extend they will be forced to do so’. ‘Transfer

union’ has become a proxy for ‘aid programme,’ involved to describe redistributive functions that

were never intended for the euro.

So what is a transfer union, and is this an accurate description of the euro? The descriptions that

merely link ‘transfer’ to ‘aid’ are mistaken: it is important not simply to understand the phrase in

terms of transfers from ‘stronger’ to ‘weaker’ states - these are merely one stage of a longer process.

14



Fundamentally, if it means anything, ‘transfer union’ refers to the interdependence of member states.

This interdependence means different things, depending on your perspective. This is what I aim to

discover here.

According to Wolf, four ‘games’ are being played simultaneously in the global financial system

whereby public and private debts are inextricably linked together. The first three games help explain

why the euro zone is in crisis. The last captures what is at stake when the euro is described as a

transfer union:

! Game 1 is between banks: the aim of each player is to ensure that bad loans end up

somewhere else, while collecting fees

! Game 2 is between banks and private sector customers: the aim is to sell financial services

while ensuring that the losses end up with the customers.

! Game 3 is between banks and the state: the aim is to ensure that, if all else fails, the state

ends up with these losses - while banks gain by short-selling states most stretched by

bailouts.

! Game 4 is between states: the aim is to ensure that other countries borrow excess supply

(this is the savings glut), and Wolf calls it “beggaring your neighbours, while feeling

moral about it”. This is his most controversial point and his own contribution to the

global ‘blame game’ - blame Germany, blame China. At least it is a corrective to the

usual argument, which is simply to blame deficit countries for profligacy, and borrowers

for ‘living beyond their means’.

The underlying logic of Wolf ’s analysis is that states are better off not playing the ‘blame game,’ but

co-operating. (In global terms, this was also the argument made in the IMF paper published just

before the recent Toronto G20 summit.) Analytically, we should be neither isolating any one of the

above four games as ‘causing’ the crisis, nor isolating specific parties - banks or states in general,

particular banks or particular states - as responsible. The immediate practical question is what kinds

of policy response would work (see for example the IMF G20 paper). The more far-reaching

theoretical question is what the interdependent games tell us about fundamental connections within

the world’s financial system, and how these connections impact upon states, particularly on the role of

these states as producers and managers of money. This has become the crucial question in the euro

zone crisis, and the question I am asking here.

The significance of the distinction between money and finance can be grasped by thinking through

the sociological relations that each involves. This means, for example, comparing the euro zone as a

monetary system with the euro zone as a system of state financing . Both systems involve debt . But the debt

in reach case has a distinctive underlying structure, and this brings me to the crucial theoretical

claim of my argument in this paper. The money/finance distinction can be deepened by mapping it

onto a distinction drawn by Bataille: namely, the distinction between restricted and general economy

that he makes in The Accursed Share. In particular, I refer to Bataille’s arguments about the Marshall

Plan and the Bretton Woods agreements - both of which bear comparison with the EU and theeuro.

15



What potential insights into the euro might Bataille’s perspective on general economy yield? The

history of economic integration in Europe has been characterised by the rhythms of accumulation –

abundance, waste and expenditure – that he underscores. It was the ‘common market,’ after all, that

gave us the lexicon of food mountains. The euro can be seen as a monetisation of this system of

‘nonproductive expenditure’ (see his 1933 essay, ‘The notion of expenditure’). Let me explain what I

mean.

After (among other things) exploring gift exchange and sacrifice among the Aztecs, Bataille turns to

modern capitalist society and, in particular, addresses the Marshall Plan in the book’s final chapter.

He draws on François Perroux’s 1948 text, Le Plan Marshall ou l’Europe nécessaire au monde.13 Perroux

draws a distinction between ‘classical’ and ‘general’ economy which maps onto Bataille’s own

distinction between restricted and general economy - classical economy makes calculations

according to the isolated interest, and is therefore opposed to the general interest (which, ultimately, is

the global interest). According to Bataille, the paradox of Bretton Woods is encapsulated in this

distinction: ‘Established within the limits of the capitalist world, according to the rule of isolated

profit - without which no transaction is conceivable - [the Bretton Woods agreement] had to

renounce its founding principles, or, in order to maintain them, renounce the conditions without

which it could not continue to exist. The inadequacy of the International Bank and the Monetary

Fund presented a negative version of the Marshall Plan’s positive initiative’ (177).

Bataille follows a two-stage argument. First, drawing on Perroux, he characterises the Marshall plan

in terms of the idea of the collective interest : the plan is an ‘investment in the world’s interest’ (177),

concerned with ‘collective supply and demand’ (177) and the ‘global distribution of labour’ (178).

Second, and against this background, he characterises the Marshall payments as ‘condemned

wealth’ (182), made by an economy ‘so developed that the needs of growth are having a hard timeabsorbing its excess resources’ (179). This second point is crucial to the rationale behind the idea of

‘transfer’. The surplus cannot be absorbed by the country producing it . This is what Wolf tries to capture in

his description of Game 4: ‘beggar thy neighbour’ is the game being played by strong , not weak,

states.14

Bataille’s central distinction, between ‘restricted’ and ‘general’ economy, describes two perspectives for

understanding economic life, they are not descriptors of actual historical formations. The restricted

economy perspective (RE) - neoclassical economics - sees ‘the economic problem’ in terms of how to

husband resources in conditions of scarcity. In RE terms, the economic surplus is an expression of

global imbalances that are defined in terms of a division between two independent economic

agents, i.e. the producer/creditor on the one hand, and the consumer/debtor on the other. There

are further, moral aspects to this division (cf. Wolf ’s Game 4 ), with agent 1 (e.g. Germany) accused by

agent 2 (Greece) of accumulating too high a surplus; or where separate currencies are involved, agent

16

13 Perroux (1903–87) was a Professor at the Collège de France and founded the Institut de Sciences EconomiquesAppliquées in 1944. He was a leading critic of First World policies toward Third World countries, emphasising the needfor the latter to built up their internal coherence and reduce their dependence on external powers. Bataille’s use of hisarguments seems rather unusual, in this respect.

14 As Wolf puts it in a recent piece: ‘The problem is that the countries that used to provide the demand – the US, atworld level, or Spain, in the eurozone – have over-indebted private sectors. So we see a zero-sum battle over shares ofstructurally deficient global demand. This is a threat to survival of the eurozone and even the open world economy,’‘Three years and new fault lines threaten,’ FT , 13 July 2010. Raghuram Rajan makes much the same point in his book,

Fault Lines (2010).

http://en.wikipedia.org/wiki/Coll%C3%A8ge_de_France

http://en.wikipedia.org/wiki/Coll%C3%A8ge_de_France



1 (China) is accused by agent 2 (US) of not allowing its currency to rise in value as a means of

redressing payments imbalances; or in either case, agent 2 (’the deficit country’) is accused by agent 1

(’the surplus country’) of spending and borrowing without producing anything.15

The general economy perspective (GE) - which Bataille develops through his analysis of gift exchange

and sacrifice - defines ‘the economic problem’ in terms of what is to be done with surplus; so in GE

terms, any surplus must be purged (this is ‘nonproductive expenditure’), repeatedly ‘clearing’ the

system as a whole of excess, hence the economic surplus either flows between groups in both directions

(gift exchange), or flows out from the group as a whole (sacrifice).

The emphasis in economic theory on aggregate phenomena is a major failing, according to Bataille.

The standard approach in economic theory is to take set of limited operations - such as the

relationship between an isolated creditor (you) and an isolated debtor (me) - and generalise that in

aggregate terms. Mistakenly, the isolated situation (a one-to-one creditor-debtor relationship) is

treated as the basis for understanding a general situation: ‘Economic activity, considered as a whole,

is conceived in terms of particular operations with limited ends’ (22). What is missing, andsociologically key, is an understanding of the emergent properties of an economic system, i.e. those

features that emerge from the relationship between its elements and cannot be reduced to them.

Thus when it comes to the question debt, it is not a simple matter of one party owing to another.

Rather, the problem concerns the requirements of the system as a whole - what Perroux called the

collective interest . This is property in the system that cannot be reduced to the relationship between

(isolated) creditors and debtors.

These perspectives therefore offer contrasting ways of thinking about the problem that characterises

the global economy in general, and the euro zone in particular, i.e. the problem of imbalances. In

particular, Bataille’s emphasis on GE suggests that economic imbalances - between China and the

US for example, and inside the euro zone between Germany and other member states - have arisen

(and are increasing) because surpluses have been accumulated as debts, not cleared. And the crucial

difference between GE and RE as far as the euro concerned stems from their different treatments of

debt .

RE suggests that there debt is a financial relationship between two independent parties with isolated

interests, whereas GE suggests that debts should circulate as gifts or sacrifices that maintain the

integrity and general interest of an entire social group, regularly ‘purging’ its surplus; debt seen

through the RE is framed in linear time, implying a logic which is reflected in the etymology of theterm itself (’final payment’) – a debt is paid off once and for all; whereas according to the GE

perspective, debt is framed in cyclical time and involves an ongoing series of payments and obligations

that never reaches a conclusion (if it did, the group would break down); and so, logically speaking,

‘bankruptcy’ from the perspective of RE stems from non-payment and places the agent who fails to

pay in an isolated legal position; whereas from the perspective of GE, it only makes sense to speak of

bankruptcy insofar as the system of payments within the group as a whole has broken down.

17

15 The logical absurdity of the charge is emphasised by Krugman in one of his regular attac ks on ‘austerity’ measuresand their stated aim of generating economic growth, when he says that ‘the world as a whole can’t move intosurplus’ ( http://krugman.blogs.nytimes.com/2010/06/18/fiscal-fantasies-2/ ). In Fixing Global F inance, Wolf also drawsthe attention to the moral absurdities at stake in such discussions: ‘If excess saving is virtuous, how can the excessspending that makes it possible be a vice? Is everybody supposed to run vast current account surpluses? If so, withwhom - Martians?’ (197). These are arguments with which Bataille would obviously concur.

http://krugman.blogs.nytimes.com/2010/06/18/fiscal-fantasies-2/





Bataille suggested that he would be accused of ‘madness’ in his description of the Marshall Plan

and the Bretton Woods agreements,16 particularly for his basic conclusion, which was that something

had to be given away. This was not, he said, simply a question of writing off ‘debts’ agreed under the

plan, but of not thinking of such payments as debts in the first place. Rather they were

‘nonproductive expenditure’, a concept which only makes sense in terms of a perspective Bataille

calls ‘general economy’. So what would be the madman’s description of money - and of the euro inparticular?

E Money

Much commentary on the euro crisis - in line with a literature of long standing - frames the problem

in terms of a tension between monetary integration and fiscal integration, or in other words, between

economics and politics. This representation is incomplete because it misses the logical distinction

between money and finance.17 This distinction corresponds to the arguments of Strange and Wolf, and

crucially, can be mapped onto Bataille’s distinction between RE (finance) and GE (money). The euro

crisis is particularly intractable not simply because the different member states lack the political willor ability to resolve it but because they cannot do so within the euro’s contradictory monetary and

financial system. One one side, their debts are in a ‘domestic’ currency, ostensibly satisfying Wolf ’s

criteria, but member states have no independent control over that currency. At an extreme, these states lack the

means to monetise their debt. (This is the line taken by Krugman, for example, when distinguishing

between the ‘sovereign debt problem’ as faced by member states of the euro zone on the one hand,

and countries such as the UK and US on the other: the latter have their own currency.) This is due

to monetary integration. On the other side, some member states are confronting serious difficulties in

raising debt through bonds. The problem is not simply fiscal, in other words, but financial. (These

are essentially two sides of the same coin: governments rely on funding from both taxpayers andbondholders.) This is down to financial disintegration.

This is partly a (state) money versus (global) finance issue, as characterised by Strange and Wolf. But it is

also the difference between RE and GE - once the euro zone crisis is seen in terms of Wolf ’s Game 4.

The euro-specific issues at stake here are discussed by De Grauwe, one of the leading experts on the

economics of European monetary integration, who argues that the euro zone lacks the the

‘automatic stabilisers’ that would be necessary in order to correct imbalances that now exist between

Greece and Germany (at either extreme) and between peripheral and core countries. He explains

this lack by reference to the fact that the euro zone is not a political union. But for De Grauwe, this

is not simply a fiscal integration issue.

By ‘stabilisers’ he does not necessarily mean fiscal integration but a central fund, as a form of

insurance. (This initiative has now been agreed and almost finalised by member states - a "750bn

18

16 ‘It will be said that only a madman could perceive such things in the Marshall and Truman plans. I am that madman,’he wrote (p. 197 n. 22).

17 Note: by ‘finance’ in this context I am of course referring to the system of financing state debt , not to the financial servicesindustry.



stabilisation fund known as the European Financial Stability Facility.)18 De Grauwe argues that ‘a

centralised budget creates an automatic solidarity (insurance) mechanism allowing countries to draw

on the resources of other countries when facing a negative shock’. In other words, the fund is a

means of rebalancing when one part of the euro zone faces a serious deficit (Greece) while another

(Germany) is in surplus. De Grauwe’s logic suggests that the nature of the euro zone as a unified

monetary system demands, in principle, that debts are circulated between member states - much as theywould, presumably, in a single state with its own currency. This has not occurred in the euro zone,

or at least not until recently, once the imbalances have become acute. Rather, sovereign debt in the

euro zone is are framed by an external financial system that has been treating each debtor state as a

distinctive entity with distinctive obligations posing distinctive risks and debts that accumulate over

time.

In other words, we have: Member states within a unified monetary system; versus Debtor states within a

fragmented financial system in which member-states are individually caught up in a series of increasingly

fragmented debt relations. We can therefore frame the euro zone crisis in terms of a distinction that

it has opened up between money and finance. This argument needs to be unpacked, however,

because money and finance involve distinctive logical structures:

! Money is rooted in a system of socialised debt whose logic is derived ultimately from what

Bataille calls general economy; versus

! Finance has been shaped by a system of private debt whose logic is wholly shaped by what

Bataille calls the logic of restricted economy.

The essential point to take from viewing money from Bataille’s perspective would therefore be that,

in principle, there is no distinction between a monetary union and a transfer union . Money, fundamentally, is

a system for circulating debts. One could retort that debts are hardly circulating in the euro zone -

Greece is ‘always’ in deficit, moreover it has a long history both of deficit and default. But this is

precisely the point: a system in which debts operate in binary relations according to the teleology of

final payment (restricted economy), one party is bound to get stuck in long-term debt

This, then, is the argument of Bataille’s madman about the Marshall Plan - applied to the euro

zone. In a system of circulating debts there can be no ‘debt traps’ of the kind we see in Greece - or

more severely, in states that have to borrow in foreign currency (these are the states that Mbembe

writes about, engaging in a practice that Wolf is trying to eradicate), who are most brutally exposedto the divergent logics of money and finance, and to the ‘punishments’ inflicted by markets.

Conclusion

I have framed the euro in terms of a distinction between money and finance, discovered in Strange

and Wolf and mapped onto Bataille’s distinction between GE and RE, respectively. Crucially, the

meaning of bankruptcy in each case is very different: In financial terms (RE), the bankrupt state is in

principle the state that fails to meet its debts. These debts are entered into through bonds taken out

19

18 ‘Europe agrees rescue package,’ FT, 9 May 2010. The total of "750bn comes from a combination of IMF funding (upto 250) contributions from euro zone member states in the shape of (440) and the EC (60). There are plans to fund thefacility with a dedicated AAA-rated bond backed by member-state guarantees. This could be interpreted as a nascent‘Eurobond’ (see below).



as if between private parties: the state is essentially treated as a debtor much as a firm or household

would be. This state may go bust or default, and is therefore ‘in crisis’ - this, logically, may be its

‘state of emergency’ as Agamben defines it.19 This, essentially, is Schäuble’s logic. In monetary terms

(GE), the society that issues the money is recycling (not ‘paying off ’) debts. Here, debt appears to

provide a mechanism for moving surplus around the group, incurring and meeting obligations,

gaining prestige, issuing challenges, enacting rivalries and purging excesses. This group cannot gobankrupt. This, essentially, is Wriston’s logic.

The euro exposes the logical conflict that arises here: debts cannot be transformed from one logic to

the other because they are no longer conflated, a gap has opened up between the two systems -

money and finance - that the stabilisation fund has been conceived in order to fill. But this gap is

present in all modern monetary systems, which have been operating in tandem with the

monetisation of government debt since around the sixteenth century. The gap usually disguised by

sovereignty: first, by the state’s monopoly over law (the state defaults and its debts are restructured);

and second, by its monopoly over money (devaluation).

So the euro is not fundamentally different from other currency systems. Just like them, it depends on

two logics, money and finance, that run in parallel but potentially conflict. Where the euro is

different, arguably, is that the two logics have come into conflict because the boundaries defining

each have fallen out of line: the monetary logic remains unified while the financial one is falling

apart. The euro highlights this problem, which is common to all modern monetary systems, by

virtue of its being a currency union during a financial crisis.

So can the euro be fixed? The monetary and financial dimensions of the project have fallen apart:

we are left with monetary union and financial disintegration. The logical choice is between either integrating

the euro’s financial architecture or dismantling its monetary apparatus. In the present context, the GE

perspective demands that we integrate finance, not fragment money. I would add that this has been

happening anyway, to a degree. The critics are right when they say that the euro has turned into a

transfer union. But it always has been: the euro effectively monetized a system that had been devised

to manage imbalances through the single market. The critics are therefore mistaken when they put

this idea in opposition to monetary union.20

It is puzzling that financial integration is so little talked about, instead the focus is almost always on

tax - this is one side of the fiscal equation, with no reference to the markets, other than as ‘bond

vigilantes’ whose wrath must be avoided through austerity measures. So would fully-fledgedfinancial integration necessarily be achieved if there was full-fledged fiscal integration? Perhaps the

20

19 Legally, and through an independent currency, states can render themselves immune - and this in itself is a form ofsovereignty. Both forms of sovereignty have been reconfigured within the eurozone, pooled and rendered uncertain.

20 In these terms the euro itself therefore did a number of things: a) it replaced the old currency hierarchies (and indoing so dismantled a monetary means of managing surplus, by devaluation, etc.); b) it concealed a redistributivemechanism whereby countries like Greece, Spain, Ireland gained from joining up mainly through a significant easing ofcredit (need data on real interest rates pre and post euro in all member states); and c) it consolidated the power ofprivate banks, mainly by drawing countries into their sphere of obligation (via debt) that had hitherto been on itsmargins, countries that were now able to borrow at lower rates of interest because they were under the euro umbrella(their debts were ‘guaranteed’ by the euro collective, with Germany at its centre – the old currency hierarchy, with theDeutschmark as its apex, was replaced by a hierarchy of debtors, only now the poorest countries were at the top and themechanisms that were previously used to even out imbalances – devaluation of currency – no longer available). It ismainly this system of collective state finance that seems to have broken down.



question should be asked the other way around - could there be fiscal integration without financial

integration. The immediate question then might be: why have proposals for a common Eurobond

received so little support, and been so little discussed?

Political discussion of the eurobond has been minimal. By commentators, prominent interventions

on the eurobond issue include those by Issing and Soros, but there has not been much debate.

Among scholars, De Grauwe and Moesen proposed a eurobond as a means of reducing the

‘distortions’ and ‘externalities’ created by divergent bond yield spreads. However, in order to placate

German fears that a eurobond would generate moral hazard problems - i.e. ‘weaker’ states would

borrow feeely in the expectation of a bailout - they propose a system of differential pricing: ‘the

interest rate (coupon) on the euro bond would be a weighed average of the yields observed in each

government bond market at the moment of the issue’ (134). This would be a transfer of security -

there would be an underlying collective guarantee for the bond - but not of resources. De Grauwe’s

fear - Germany’s fear - is that without differential pricing the eurobond incentivises those Wolf calls

‘grasshoppers’. But this is to take an isolated, RE, view which starts from the wrong place. From a

different (GE) perspective, as I have said, the stronger states ‘beggar’ the weaker states within the

euro zone. Once the problem is viewed in this way, the moral hazard argument breaks down: the

ants need the grasshoppers to borrow.

It is also curious why scholars and politicians alike take the line that only a fully-fledged political

union would cure (or kill) the euro. Political union could mean a unified tax system and public

budget, a central treasury, an economic stabilisation fund, or even what Sarkozy calls ‘economic

government’. Of course, all of these would require political consensus and commitment. But they

are forms of financial union in the first instance. In practice, the euro operates as an elaborate system

of wealth distribution whose underlying asymmetries have been laid bare during the current crisis.

My basic conclusion is threefold, drawing each point from the frameworks of Agamben, Balibar

and Bataille:

! as long as states are bound up with ‘private’ (isolated) financial relationships and can

therefore go bankrupt or default on their debts, there will be periodic economic crises,

demanding measures (such as ‘austerity’) that resemble a political state of emergency;

! the euro zone is in crisis - and facing periodic civil unrest - because the fiscus that

mediates its relationship with global capitalism has been subdivided into finance (sixteenbond markets) and money (one currency);

! the ‘solution’ to this crisis, logically speaking, would be to reconfigure the euro zone in

terms of Bataille’s GE perspective: unify the fiscus - which means a Eurobond, fiscal

coordination and treatment of German surplus as ‘condemned wealth’.

21



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http://www.voxeu.org/index.php?q=node/5062


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Appendix 1: Timeline

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dodd, eu sovereign

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