From the strict austerity to the integration through investment: The Construction of the European Financial and Monetary System (1970–2020) De la austeridad estricta a la integración mediante inversión: La construcción del sistema financiero y monetario europeo (1970 - 2020)

Abstract

This article analyzes the evolution of the European economic and financial system since 1970, when the then European Economic Community began developing mechanisms for monetary coordination under a rigid framework based on economic stability and audit discipline.  This approach revealed its limitations, particularly during the European sovereign debt crisis.  From these experiences, the European Union has been progressively incorporating greater flexibility and has adopted a more active economic policy aimed at expanding policy instruments and strengthening the capacity for public intervention.

The article is structured in several sections: The first examines the origins of the German model of austerity, stability, and audit discipline. The second section focuses on the tensions and constraints that became evident during the European sovereign debt crisis. The third one addresses the evolution towards a more investment-oriented, coordinated, and resilient approach, culminating in the response to the COVID-19 Pandemics through instruments such as NextGenerationEU.

In summary, the article analyzes how the system has evolved from a rigid framework in which compliance with audit rules was the overriding priority to one characterized by a more adaptable architecture, capable of coordinating common responses and sustaining economic growth, employment, and social cohesion in contexts of heightened uncertainty.