Monetary subordination in the Eurozone: Pillars and asymmetries

This paper explores the existence of monetary subordination in the Eurozone as an extension of the Core-Periphery approaches developed during the Eurocrisis. The analysis establishes the existence of monetary subordination in the EMU as the foundation for subordination at large. European monetary subordination is found to be supported by three pillars: the hierarchy of euro money-like balances, the nature of the euro as hybrid money and the fragmentation of the monetary jurisdictions coupled with their selective integration. To begin exploring the effects of monetary subordination, the paper introduces the analysis of the Eurozone crisis as a result of subordination coupled with deleveraging, highlighting the asymmetric impact of the latter on subordinate and non-subordinate members.