Constructing the European ‘sovereign debt crisis’,

hegemonising austerity. A narrative of European

neoliberal governmentality.A summary

Pia Ljungman

pia.ljungman@mac.com

Introduction

This paper is a summary of my MA thesis that utilised discourse theory in ana-

lysing the construction of the European ‘sovereign debt crisis’ narrative in

spring 2010.1 It charted the trajectory of the narrative and examined the politi-

cal subject positions within it to outline the hegemonic political economic dis-

cursive practises that structure the political economic order in Europe. The pa-

per argues that the European ‘sovereign debt crisis’ was constructed to fill the

lack of an absent neoliberal order, constructing a fiscally reinforced neoliberal

political project aiming at reducing the European automatic stabilisers. The

narrative has subsequently legitimised austerity policies all around Europe.

I will first briefly elaborate on the theories, the data sources and the used

methodology before elaborating on the primary results of the study. The con-

clusion pulls together the central observations.

The theoretical framework

The study utilised Colin Hay’s model for the discursive construction of crisis,

emphasising the narrativity of crisis and conceptualising crisis “as a politically

mediated moment of decisive intervention and structural transformation...in

the process of institutional change.”2 Crises are subjective representations,

constructions of perceived failure, framed through narrative and discourse.3

A crisis construction must, according to Hay, be “sufficiently flexible to ‘nar-

rate’ a great variety of morbid symptoms while unambiguously attributing

causality and responsibility”4 in a way that often has very little similitude to

the contradictions and failures they intend to narrate.

2

Ernesto Laclau’s political discourse theory stresses the inextricably linkage of

socially constructed meaning, interpretation and praxis.5 The social is discur-

sively constructed and not given a priori.6 For Laclau articulation means “any

practice establishing a relation among elements such that their identity is

modified...”.7 Discourse is the “systems of meaning and practice that consti-

tute the identities of subjects and objects.”8 To hegemonise a content amounts

to fixing its meaning around a nodal point, developing from any contingent

possibilities.9 A perceived ‘objectivity’ arises from a decision to articulate

some element together while simultaneously repressing other possible alterna-

tives. The perceived objectivity is thus formed as a power relationship and the

repressed alternatives tend to vanish over time. As a result the decided articu-

lation appears as a necessity.10 Discursive political analysis aims at revealing

the radical contingency of the ostensible objectivity, i.e to “reinsert it in the

system of real historic options that were discarded…” 11

By using political discourse analysis, the aim was to overcome the idea of the

economic being at any point ontologically disembodied from any discursive

political project. Furthermore, it enabled to examine the actors, whether politi-

cal or financial, as participants in political projects striving to articulate exten-

sive numbers of social signifiers around themselves to discursively frame the

new normative during an economic failure.12

The starting point was to analyse the discourses during a structural dislocation,

which was conceptualised as an economic failure, the financial crisis, in an

3

established neoliberal political economic order. According to Hay, when the

state’s structural continuity or legitimacy is threatened, for instance in eco-

nomic failure, a greater level of state agency and cohesion can be realised, if a

“discursive unity is reimposed upon the disaggregated structures and institu-

tions of the state.”13 Relative stability and tranquil periods are legacies of for-

mer crises which, according to Hay, “set the parameters within which the

agencies and institutions that give effect to state power must operate.”14 A

structural dislocation shatters the entire field of the social, causing a distur-

bance in operational power as well as inducing an identity crisis of the

subject.15 The financial crisis of 2007 sent shock waves throughout an institu-

tionalised neoliberal order, dislocating a neoliberal social structure that had

been seemingly stable prior to the crisis. This triggered a response from vari-

ous antagonistic forces aiming to recompose a dislocated structure around par-

ticular nodal points.16

Data sources and the methodological framework

The material consisted of the Financial Times coverage supplemented by pol-

icy pronouncements, speeches, research reports and additional mainstream and

specialist media coverage. The reason to choose this material was twofold:

first, it is important to examine the public debate during a structural disloca-

tion. Second, much of the material, for instance, the European Central Bank

(ECB) minutes or any ‘behind closed doors’ negotiation reports are impossible

to obtain due to the non-transparent nature of European political economic de-

cision making. The primarily focus was from January 2009 to May 2010, al-

though the trajectory of the narrative was traced from 2007 onwards.

4

The material was grouped according to the crisis related fiscal policy stances

and the advocated structural and conjunctural modes of political rationality,

i.e. responses to systemic failure where the institutional form is fundamentally

transformed or a solution is sought within the pre-existing structures of the

regime.17 The study examined in detail the European Monetary Fund debate

(March 2010), the discourse regarding the International Monetary Fund's

(IMF) involvement in the Greek ‘rescue operation’ (spring 2010) and the ad-

vocated fiscal policy stances particularly by the European Commission (EC)

officials, the ECB officials and the sovereign politicians. Analysed actors con-

sisted of IMF officials, ECB officials, with a special emphasis on the articula-

tions by Trichet, EC/EU civil servants and the articulations by Rehn and Bar-

roso. Other examined actors included sovereign politicians, with a special em-

phasis on the articulations by Sarkozy, Merkel, Papandreou and Osborne, as

well as credit rating officials (Moody’s, Finch, Standard & Poor).

A short trajectory of the fiscal meta-narrative

In the immediate aftermath of the financial crisis the US and the UK govern-

ments’ discursive subject positions were predominately mainstream Keynesi-

an,18 advocating monetary and fiscal ‘stimulus packages’ and disregarding the

increasing fiscal deficits because of the ‘exceptional economic situation’.19

The G20 called for co-ordinated global fiscal stimulus measures at the Wash-

ington meeting in November 2008,20 however, by June 2010 the tone was al-

together different, calling to halve the fiscally induced budget deficits by

2013, while giving each country latitude to cut spending at its own pace.21 The

5

G20 agenda thus shifted in less than two years, from an outwardly coordinated

expansive ‘financial crisis response’ to contractive sovereign fiscal policies.

The discursive shift was notable in the examined material. During 2008 fiscal

expansion was predominately linked to the financial crisis and the contingent

government stress over the liabilities for delinquent bank debt. Although the

European (and global) post-financial crisis recovery remained fragile, by late

2009 the discourse had however centred around a meta-narrative of an exit-

strategy from post-financial crisis expansionary fiscal policy. This was an ac-

cepted reality for all the examined actors, demanded by the EC and advocated

by the ECB.22

By the time the EC condemned Greece for falsifying data on its public fi-

nances in January 2010, invoking increased market jittery, ‘excessive’ levels

of sovereign fiscal debt was to a large extent considered to be problem.23 Al-

though it could have been dealt with at time, I suggest that the early Greek ‘li-

quidity problem’ became a discursive sideshow concerning the post-financial

crisis fiscal order in Europe. It enabled the examined political projects to pre-

sent their particular objectives as those, which carry out the filling of the lack

of European neoliberal order and regularity. In other words, the examined po-

litical projects benefitted in each particular way through participating with the

meta-narrative, whether to regain prestige24 or old power-struggles,25 to advo-

cate hawkish fiscal rigidity,26 to win a ‘deficit-cutting’ election,27 to enforce

the Stability and Growth Pact rules,28 or merely to advocate nationalism.29

6

The identification of the post-financial crisis ‘fiscal failure’

There was an acknowledged distress already in 2008 among the financial sec-

tor regarding a possible ‘ultra-safe’ state failure due to a post-financial crisis

overextension of governmental fiscal responsibilities.30 I suggest that the

mainstream Keynesian financial crisis responses, for instance, the stimulus

measures and the prioritisation of automatic stabilisers at the expense of fiscal

deficits coupled with an uncertainty in the inclination of government spending,

represented a structural uncertainty and quite possibly an existential threat for

many, especially in the financial sector.31 The mainstream Keynesian financial

crisis responses violated market-driven rules and identities.32

Hay highlights the importance of the “construction of the moment of crisis as

a moment of crisis,”33 involving “active display of agency by actors or bodies

which have some autonomy at the level which the crisis is identified.”34 For

instance, the material established the EC as the prime articulator of a ‘Greek

crisis’, centred on Greek sovereign economic mismanagement and its diver-

gence from the institutionalised European ‘rules’. This directed the discourse

away from the underlying structural causes or the need for changes in the neo-

liberal European macroeconomic policy framework.35 Following Hay, the

“disparate effects of a great variety of independent policy failures and contra-

dictions”36 were thus abstracted and narrated in a simplified discourse. This

narration was beneficial for the EC as it enhanced its political power to en-

force the European ‘rules’, for instance, the Stability and Growth Pact deficit

limit. Although this narration has subsequently spiralled out of hand, at the

time it was also beneficial to the examined sovereign politicians in as much as

7

it validated an arms-length distance to political responsibilities, especially

over central sovereign and international economic processes and policies.

The distress regarding an overextension of governmental fiscal responsibilities

was in the material first articulated by the financial sector.37 The overextension

was essentially a consequence of the public bail-outs in the private financial

sector.38 I argue that it was in this context that the automatic stabilisers, espe-

cially the public transfer mechanisms, became perceived as a ‘fiscal failure’,

rather than as counter-balancing stabilisers in a downturn. Mainstream

Keynesian post-financial crisis stimulus measures that advocated public inter-

est had to go.

I suggest, that the examined political projects, the ECB, the sovereign politi-

cians, the EC/EU and the IMF associated with the perceived ‘fiscal failure’

narrative of the financial sector. It enabled the preferred sovereign and/or re-

gional structural neoliberal unity to be ”reimposed upon the disaggregated

structures and institutions”39 within a post-financial crisis Europe. Whether

the actors were aware of it or not, the discursive nodal point in the material

was to restore an institutionalised European neoliberal unity, ruling out any

meaningful discourse regarding structural changes in the European political-

economic order.40 Furthermore, it enabled the examined actors to advocate

their particular agendas within the ‘fiscal failure’ narrative, enabling it to spiral

into uncountable re-articulations, subsequently constructing the hegemonic

discourse of the European ‘sovereign debt crisis’. The automatic stabilisers

were a favourable target in a treaty-bound European macroeconomic policy

8

environment, where, for instance, the 3% SGP limit for public deficits had

long been a difficult target to meet, despite continuous cuts in public spending

already before the financial crisis.41

The construction of the European ‘sovereign debt crisis’ narrative

The European ‘sovereign debt crisis’ could not be politically narrated without

constructing it as an objectivity that was external to the dislocated neoliberal

structure, the financial crisis, and the institutionalised structure of European

governmentality. Following Laclau, this concealed “the traces of original

contingency...its original dimension of power.”42 Therefore, the European

‘sovereign debt crisis’ narrative became externalised of its historicity and its

contingent political power relations and constructed first as a crisis of sover-

eign fiscal overextension, signifying the absence of an ideal neoliberal regular-

ity. A deviation from the ideal order was predominately represented as corrup-

tion, misery, chaos, laziness or decay. Such narration legitimises a power

structure that secures an overall context that favours the reinforcement of

binding and, in this context, essentially ideological ‘credible rules’, which

limit sovereign or regional political economic room for manoeuvre.43 It ampli-

fies the power of any ‘independent’ authority, such as the ‘independent’ central

banks and international financial institutions, the private credit rating agencies,

as well as the private markets.

As an empty signifier, signifying everything yet nothing, the European ‘sover-

eign debt crisis’ (and its sovereign variations), is usable when public legitimis-

ing is needed for an intensified neoliberal social ordering, for instance, gov-

9

ernment downsizing, public spending cuts or further privatisation. Such usage

was extensive in the material.44 Even where such social ordering is opposed, it

reinforces the hegemonic power of the empty signifier. The construction has

made it possible to reduce concrete social agents - to whom the sovereign poli-

ticians are accountable - to mere fiscally wasteful economic categories. This is

an antagonism in as much as it denies the democratic identity of the social

agents. The outcome of this antagonistic process has been dialectical in as

much as the negativity experienced by the social agents has been reduced to

”the mere appearance of an ‘objective meaning’ which escapes them.”45 This

legitimates an objectified neoliberal political project, in which particular po-

litical projects are able to justify austerity policies whether they are needed or

not.

Restoring the neoliberal order was beneficial in each particular way for the

examined discursive actors. Whether the actors were aware of it or not, it was

therefore a unitary political project. As a result, the European ‘sovereign debt

crisis’ was constructed as a nodal point for an absent neoliberal order. To con-

cur with Colin Leys, “politics are no longer about managing the economy to

satisfy the demands of voters... [but] about getting voters to endorse policies

that meet the demands of capital.”46

In a large part of the developed world, the ‘age of austerity’ now replaces a

pronounced post-financial crisis era of ‘big government’. The momentum for a

change from deregulatory neoliberalism with its market-driven politics to a

political economic regime more suitable to curb macroeconomic volatilities

10

and inequalities seem lost for the time being.47 The European ‘sovereign debt

crisis’ narrative has a profound structural influence on the form of the region

and beyond, integral to the further evolution of the neoliberal regional and

global structures.48 The public discourse regarding changes in the structural

European political economic model has been diluted, enforcing partisan popu-

lism that strengthens the hegemonic narrative. The underlying policy funda-

mentals remain unaddressed, for instance, the limited macroeconomic objec-

tives pursued by the ECB, now intensified by the reinforced SGP predeter-

mined budget deficit limit. Moreover, the narrative has watered down the dis-

course of wider post-financial crisis systemic changes (for instance, the Basel

III). It is ‘a good crisis’ for neoliberal status quo interests, but not for the

austerity-ridden public interest.

Conclusion

The financial crisis mainstream Keynesian responses represented a structural

dislocation in the neoliberal order. It was in this context that the European

automatic stabilisers, particularly the public transfer mechanisms, became

identified by the financial sector as a failure of governmental fiscal policy. The

‘fiscal failure’ narrative was acted upon by the examined discursive political

actors, the ECB, EU/EC civil servants, IMF officials and the examined sover-

eign politicians. The European ‘sovereign debt crisis’ became constructed as a

nodal point for an absent neoliberal order, constructing a fiscally reinforced

neoliberal political project aiming at reducing the European automatic stabilis-

ers. This was according to a preferred historical and institutional neoliberal

unity that could be reimposed upon the disaggregated structures and institu-

11

tions within a post-financial crisis Europe. The European ‘sovereign debt cri-

sis’ has reconstructed the global neoliberal order where the market – and the

rating agencies – have reclaimed their hegemony over public policy.

12

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1 The limited space available allows this paper merely to outline the main issues. I regret this happens partly to the detriment of the complexities relating to the addressed questions. Ljungman, Pia, ”Constructing the European ‘sov-ereign debt crisis’, hegemonising auterity. A Narrative of European Neo-liberal Governmentality.” Unpublished MA dissertation. University of London, School of Oriental and African Studies, Centre for International Studies and Diplomacy, 2010.

2 Hay, Colin, “Crises and the structural transformation of the state,” Brit-ish Journal of Politics and International Relations, Vol 1/3 (October 1999): 323. See also Ibid., 317-323.

3 Ibid., 68.

4 Ibid., 335.

5 Howart, David, Stavrakakis, Yannis, “Introducing discourse theory and political analysis,” in Howarth, David, Norval, Aletta, J., Stavrakakis, Yannis, eds., Discourse theory and political analysis (UK: Manchester University Press, 2000), 6.

6 Laclau, Ernesto and Mouffe, Chantal, Hegemony and Socialist Strat-egy. Towards a Radical Democratic Politics, 2nd ed. (UK: Verso, 2001), 93-148.

7 Ibid., 105

8 Ibid., 6

9 Laclau, Ernesto, New Reflections on the Revolution of Our Time (UK: Verso, 1990), 28.

10 Ibid., 30.

11 Ibid., 34.

12 Laclau, Ernesto, New Reflections on the Revolution of Our Time (UK: Verso, 1990), 28

13 Ibid.

14 Ibid., 332.

15 Howart, David, Stavrakakis, Yannis, “Introducing discourse theory and political analysis,” in Howarth, David, Norval, Aletta, J., Stavrakakis, Yannis, eds., Discourse theory and political analysis (Manchester, UK: Manchester University Press, 2000), 13.

16 Laclau, Ernesto, New Reflections on the Revolution of Our Time (UK: Verso, 1990), 40.

17 The distinction is made by Offe and quoted in Hay, Colin, “Crises and the structural transformation of the state,” British Journal of Politics and In-ternational Relations, Vol. 1/3 (October 1999): 328

18 These are the two dominant financial centres in the world. Mainstream Keynesianism is conceptualised as applicable in the short-term when the econ-omy needs to be ‘kick-started’ in a downturn, and it does not seek to amend the political economic social ordering by, for example, public or political man-agement in bailed out financial institutions, a continuous command over the ‘monetary production economy’ or effective aggregate demand management adjusted to public anchors. Sheehan, Brendan, Understanding Keynes’ General Theory (UK: Palgrave Macmillan, 2009), 10.

19 See for instance “Obama's Speech on the Economy,” The New York T i m e s , 8 . 1 . 2 0 0 9 (http://www.nytimes.com/2009/01/08/us/politics/08text-obama.html).

18

20 McKee, Michael and Kennedy, Simon, “G-20 May Endorse Stimulus, L i t t l e E l s e a s B u s h E x i t s , ” B l o o m b e r g , 2 8 . 1 1 . 2 0 0 8 , (http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ahyQOB.59C8A&refer=home).

21 For an interesting report on the finance ministers’ meeting before To-ronto see Giles, Chris, “G20 drops support for fiscal stimulus,” The Financial Times,5.6.2010(http://www.ft.com/cms/s/0/786776b4-708f-11df-96ab-00144feabdc0.html)

22 The ECB articulated it wanted a global Eurozone lead in central bank exit strategies, preferring a swift consolidation and advocating fiscal rigidity.

23 The timing of the EC condemnation was interesting. Moreover, the Greek swaps deals that were condemned by Bruessels had been a general praxis by many Eurozone countries. Belgium, for instance, securisated its fu-ture collection of unpaid taxes. The rules were somewhat tightened in 2002 and 2005 by Eurostrat. Hope, Kerin, “Securitisations set sights on Greek ru-ins,” The Financial Times, 16.2.2010. Hope, Kerin, Murphy, Megan, Tett, Gil-lian, “Athenian arrangers,” The Financial Times, 17.2.2010.

24 According to the FT, for instance, it was hard for IMF officials to hide their excitement in the regained IMF prestige. The ECB had secured its ‘inde-pendence’ over Eurozone monetary policy and the IMF “[could thus not] ask for any action on the exchange rate, [and] the fund [would] have to impose very tough conditions on fiscal policy.” IMF could now enhance its structural fiscal adjustment mandate with its first ‘assistance’ to a west European country since the 1970s. Beattie, Alain, “Fund struggles to conceal glee at rise to Olympian peak,” The Financial Times, 26.3.2010.

25 The EMF debate exposed the complex German-Franco relationship with their divergent EMU interests. France has historically preferred an ‘eco-nomic government’ with stronger political powers to co-ordinate economic policy while Germany has stressed ECB independence, fiscal discipline and a strong currency. See, for instance, Peel, Quentin, “Franco-German dynamics make unified policy a distant goal,” The Financial Times, 9.3.2010. Arestis, Philip, McCauley, Kevin, Sawyer, Malcolm, “From Common Market to EMU: A Historical Perspective of European Economic and Monetary Integration,” The Levy Economics Institute of Bard College, Working Paper No. 263/2000.

26 As ECB’s Trichet, for instance, in the European Parliament: “most countries in the euro area have exceeded the 3% reference value for the deficit ratio. Under these circumstances, the Stability and Growth Pact, which has been put in place to safeguard sound and sustainable fiscal positions, should be rigorously applied. The ECB calls to strengthen the governments’ commitment to strictly adhere to its provisions...we welcome a focus on the expenditure side, because the size of the public sector has significantly increased in the crisis and because expenditure-based consolidation has proven to be more effective in the past.” Trichet, Jean-Claude, “Hearing at the Economic and Monetary Affairs Committee of the European Parliament,” European Central Bank, 22.3.2010 (http://www.ecb.int/press/key/date/2010/html/sp100322.en.html)

27 The Tories in the UK articulated the most explicitly hawkish fiscal subject position in Europe. UK’s drastic budgetary cuts were legitimised by Osborne with the ‘sovereign debt crisis’. Osborne, George, “The sovereign debt crisis means we need to reduce the deficit even more quickly in order to protect our economy...Germany has already announced 30 billion euros worth of cuts to welfare spending. And others are taking similar steps”. Osborne, George in Caledonian Mercury, “Full Text of George Osborne’s Speech,” Caledonian Mercury, 22.6.2010 (http://politics.caledonianmercury.com/2010/06/22/full-text-of-george-osbornes-budget-speech/).

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28 As the examined articulations by the EC civil servants. Furthermore, on March 17th 2010 the EC warned the Eurozone’s four biggest members - Ger-many, France, Italy and Spain - that their growth forecasts were too optimistic, endangering their potential to cut deficits in line with the rules in the SGP. Largely unnoticed, and despite the Greek liquidity problem and the fragility of the global/European economic recovery, the executive body of the EU had taken the stance that Eurozone deficit reduction in line with the SGP was nec-essary. In other words, the EC ‘fixed’ the chain of significance within the meta-narrative according to the conjunctural mode of political rationality, beneficial in upholding its own position according to EU’s neoliberal institu-tionalised historicity. Barber, Tony, “Brussels warns forecasts too optimistic,” The Financial Times, 18.3.2010. The Financial Times, “Britain still lacks a fiscal exit strategy, The Financial Times, 18.3.2010. See also European Com-mission, “European economic forecast, spring 2010,” European Commision Report (http://ec.europa.eu/economy_finance/eu/forecasts/2010_spring_forecast_en.htm).

29 The media as well as politicians around Europe circulated effectively ‘the myth of the lazy and corrupt Greeks’. See, for instance, The Local, ”Greek row with Germany over debt turns nasty”, 24.2.2010 (http://www.thelocal.de/politics/20100224-25487.html).

30 The Eurozone spreads in the CDS market continued to widen largely unnoticed in 2008. The exceptional need for Western ‘ultra-safe’ governments to post collateral “to ensure the bank can recover money owed if the other party goes bust” was discussed among bankers. Tett, Gillian, “Sovereign risk tops bankers’ 2010 fears,” The F i n a n c i a l T i m e s , 2 2 . 1 2 . 2 0 0 9 (http://www.ft.com/cms/s/0/f5d55764-17ee-11df-a74d-00144feab49a.html).

31 See Laclau, Ernesto, New Reflections on the Revolution of Our Time (UK: Verso, 1990), 31-33. According to Laclau, ”the constitution of social identity is an act of power and that identity as such is power.” Ibid., 31.

32 Laclau, Ernesto, New Reflections on the Revolution of Our Time (UK: Verso, 1990), 11. Ironically, this did not, however, apply to the financial sector bail-outs.

33 Hay, Colin, “Rethinking Crisis: Narratives of the New Right and Con-structions of Crisis,” Rethinking Marxism, 8:2 (June 1995): 64.

34 Hay, Colin, “Crises and the structural transformation of the state,” Brit-ish Journal of Politics and International Relations, Vol 1/3 (October 1999): 323.

35 For a discussion on this see, for instance, Arestis, Philip, Sawer, Mal-colm, “Macroeconomic Policy and the European Constitution,” Arestis, Philip, Sawer, Malcolm, eds., Alternative Perspectives on Economic Policies in the European Union (Hampshire: Palgrave Macmillan, 2006), 2-5.

36 Hay, Colin, “Crises and the structural transformation of the state,” Brit-ish Journal of Politics and International Relations, Vol. 1/3 (October 1999): 325.

37 Sovereign debt concerns in the Eurozone were first identified in the material by the investors on the credit default swap market in 2008 and the banking sector in 2009. See for instance Tett, Gillian, “Keep a close eye on what happens to sovereign CDS,” The Financial Times, 10.10.2008 (http://www.ft.com/cms/s/0/021311fe-9665-11dd-9dce-000077b07658.html), Tett, Gillian, “Sovereign risk tops bankers’ 2010 fears,” The Financial Times, 2 2 . 1 2 . 2 0 0 9 ,(http://www.ft.com/cms/s/0/f5d55764-17ee-11df-a74d-00144feab49a.html), Giles, Chris, “Public finances crumble under debt burden,” The Financial Times, 25.3.2009,(http://www.ft.com/cms/s/0/4200f0f6-1991-11de-9d34-0000779fd2ac.html), Financial Times, “Pound foolish,” The Financial Times, 19.1.2009, (http://www.ft.com/cms/s/3/4bddf6e6-e60b-11dd-8e4f-0000779fd2ac.html), Gangahar, Anuj, “Greenspan joins NY hedge fund,” The Financial Times, 15.1.2008,(http://www.ft.com/cms/s/0/6ccb18b8-c2fb-11dc-b617-0000779fd2ac.html), Jones, Sam et al., “Hedge funds prosper from buying Greek debt,” The Financial Times, 1.3.2010.

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38 Despite no or minimal public or political management in the private financial sector bail-outs .Moreover, as the state and the financial markets are mutually constituted, the result has been a unitary “step-by-step construction of a too-big-to-fail regime” where the state comes to rescue in failures albeit not vice versa. See Panitch, Leo, Konings, Martijn, “Myths of Neoliberal De-regulation,” New Left Review, 57 (June, 2009): 78.

39 Hay, Colin, “Crises and the structural transformation of the state,” Brit-ish Journal of Politics and International Relations, Vol 1/3 (October 1999): 332.

40 As for instance the SGP, ECB inflation target mandate etc.

41 Milios, John, “European Integration as a Vehicle of Neoliberal Hegem-ony,” in Saad-Filho, Alfredo, Johnston, Deborah, eds., Neoliberalism. A Criti-cal Reader (London: Pluto Press, 2005), 210.

42 Laclau, Ernesto and Mouffe, Chantal, Hegemony and Socialist Strat-egy. Towards a Radical Democratic Politics, 2nd ed. (UK: Verso, 2001), 34.

43 Burnham’s italics. Burnham, “New Labour and the politics of depolti-cisation,” British Journal of Politics and International Relations, Vol.3/2 (June 2001):142.

44 See pages 6 and 7 and its endnotes for a short summary.

45 Laclau, Ernesto, New Reflections on the Revolution of Our Time (UK: Verso, 1990), 18.

46 Leys, Colin, Market-Driven Politics. Neoliberal Democracy and the Public Interest (UK: Verso, 2003), 68.

47 For market-driven politics see Leys, Colin, Market-Driven Politics. Neoliberal Democracy and the Public Interest (UK: Verso, 2003).

48 Hay, Colin, “Crises and the structural transformation of the state,” Brit-ish Journal of Politics and International Relations, Vol 1/3 (October 1999): 67.