(De)fault lines? the EU, national governments, and private capital markets in the post-crisis era

The member governments of the European Union are now attempting to move beyond the banking, debt, and fiscal crises that have occupied their attention for much of the last four years. As they do so, both as individual national governments and as a collective entity, what lessons ought they to take away from the crisis? And, as social scientists grapple with how to explain the occurrence of, as well as the reaction to, the crisis, what can we learn about the domestic political conditions under which governments privilege their external commitments over their internal ones? In addressing these questions, this chapter focuses on three areas: The nature of the constraints on (and opportunities for) governments that private capital markets provide; the interaction of these market-based constraints with domestic political demands in various member states; and the role of the United States as either a partner for or a competitor with the European Union.