Monetary Subordination in the Eurozone: Core-Periphery through Money, Finance, and Subordinate Integration

PhD thesis, supervised by Prof. Costas Lapavitsas, SOAS University of London

Subordination inside a monetary union is obvious in aggregate -- persistent yield spreads, divergent productivity -- and elusive in its specific forms. This thesis identifies the forms.

The argument starts from monetary subordination as the vertex of subordination, and from the peculiarity of a monetary union: it is the most extreme form of monetary integration, which makes subordination more visible in appearance and more subtle in mechanism at the same time. Shared money formalises it.

Three pillars

Monetary subordination in the EMU rests on monetary hierarchies,^[1] hybrid money, and the selective fragmentation and integration of euro-area markets and institutions. Each is taken twice: as it appears, and through the mechanisms that sustain it -- with empirical support from official datasets that are largely unused, balance-sheet analysis and graphical representation.

Consequences

Italy.^[2] The single currency did not remove subordination; it reframed it. The centre shifted from the USD-based international system to a euro-centric form, with direct consequences for domestic economic development. Italy's financial and economic fragility cannot be fully read without that lens.

Six member states. A comparative analysis of financialisation shows subordinated EMU members behaving like subordinated emerging markets: their financialisation is shaped by their position in the hierarchy.

Related: Eurozone · Macro-Structures & DMO · GEGI Study · Publications