Integration in Times of Instability: Exchange Rate and Monetary Cooperation in Mercosur and the EU

The process of regional integration is essentially a process of institutionalising a new political and economic order. Both in the strong political variant of the EU’s and in the ‘common market’ version of Mercosur, regional agreements entail a partial restructuring of previously existing frameworks of socio-economic policy action. Firstly, the decision to move a specific issue from a national to an international level means a partial reshuffling of authority by moving up the locus of decision-making, and a partial re-consideration of the nature of the state, as the sole regulator of socio-economic life. Secondly, this entails a political renegotiation of how civil society, the economy and the relevant (new) level of public authority have to be organised, thus opening the door for political struggles among ideological/ideational alternatives. This is what has fascinated social scientists who try to explain the phenomenon of regional integration. Why and how do states agree to undertake such challenging political tasks? And what are the factors that drive the integration process?