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Competing Interest
Groups and Lobbying
in the Construction
of the European
Banking Union

Giuseppe Montalbano
Competing Interest Groups and Lobbying in the
Construction of the European Banking Union
 Giuseppe Montalbano

Competing Interest
Groups and Lobbying
in the Construction of
the European Banking
Union
Giuseppe Montalbano
Department of Political Science
LUISS Guido Carli Free International University
Rome, Italy

ISBN 978-3-030-65424-5    ISBN 978-3-030-65425-2 (eBook)

https://doi.org/10.1007/978-3-030-65425-2

© The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer
Nature Switzerland AG 2021
This work is subject to copyright. All rights are solely and exclusively licensed by the
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exempt from the relevant protective laws and regulations and therefore free for general use.
The publisher, the authors and the editors are safe to assume that the advice and information
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The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
To my parents
 Acknowledgments

This work is the product of a long journey that started with my Ph.D. at
LUISS Guido Carli in Rome and continued in the subsequent post-doc
years, going through many phases of my academic life, changes of mind,
and challenges. For sure, the birth and realization of this book would not
have been possible without those scholars and friends who have accompa-
nied me in the course of its development and several remakes. First of all,
I have to thank Leonardo Morlino for having accepted to be my
Ph.D. supervisor at LUISS Guido Carli and for guiding me in the thesis
work. I want to reserve a special thanks to Bastiaan Van Apeldoorn, whose
work has been a veritable source of inspiration for my thesis and who then
became a precious guide in the development of my research project as co-­
supervisor. Of course, my Ph.D. project has been enriched, thanks to the
fruitful dialogue and exchanges with my colleagues and scholars at
LUISS. In particular, I would like to thank Raffaele Marchetti for his
advice on issues related to participatory democracy and Civil Society
engagement at the EU level; Domenico Melidoro, for being a unique
reference point during the Ph.D. years; Silvia Menegazzi, for our conver-
sations and mutual support. Particular thanks are due to Mario Telò, who
introduced me to teaching International Relations and European
Integration, becoming a key reference figure for my academic career growth.
After my Ph.D., the continuation, refinement, and further develop-
ment of this work owe much to scholars and colleagues who enriched my
understanding of the EU financial regulation through their suggestions,
constructive criticisms, and confrontations. Thus, I have to thank Manuela
Moschella for giving me the opportunity to work at the Department of

vii
viii ACKNOWLEDGMENTS

Political Science of the Scuola Normale Superiore in Florence and all the
post-doc colleagues at Palazzo Strozzi, in particular the “quartermaster”
Lorenzo Zamponi and Loris Caruso. During my post-doc in Florence, I
had the luck to meet Lucia Quaglia, whose advice and support have been
invaluable for the prosecution of this research and to whom I want to give
a special acknowledgment here. The conferences and seminars in my post-­
doc years have been a unique source of stimulus and advice from outstand-
ing scholars and colleagues who contributed unwittingly to the further
elaboration of this work. Here I would like to recall and thank Daniel
Mügge, Eleni Tsingou, Leila Simona Talani, Radhika Desai, David
Howarth, and Huw Macartney for their observations, criticisms, and
suggestions.
Lastly, my gratitude goes to all those friends of mine around Italy and
Europe who, at the same time, put up with me and supported in the ups
and downs of such a research journey: my music-mates “Utveggi,” my old
and new colleagues at Scuola Normale and LUISS Guido Carli, and my
“battle buddies” in Pisa, Rome, and around Italy. However, a special place
must be reserved for Claudia, who supported me more than anyone else,
being always close to me, even at a distance.
My last thanks go to my brother and first among all the friends of mine,
Gabriele, and to my parents, Maria Teresa and Luigi, to whom this book
is dedicated.
 Contents

Part I 1

1 Introduction  3
The Argument   7
Structure of the Book  10
Bibliography  12

2 A Critical Transnationalist Approach to the European

Financial Governance 15
Beyond the Domestic/Supranational Dichotomy in the European
Integration Theory  16
Research Design  34
Methodology and Sources  37
Bibliography  39

3 The Banking Industry in the Aftermath of the Financial

Crisis 53
The European Banking Industry in the Wake of the Twin Crises  54
Mapping Interest Groups in the EU Banking Regulation  75
Issue Salience  88
Bibliography  91

ix
x CONTENTS

Part II 97

4 The Supranationalization of Banking Supervision in Europe 99

The Construction of the Single Market and the Idea of a Single
European Supervision 102
Seizing the Moment: The European System of Financial
Supervision 107
The Single Supervisory Mechanism 117
Conclusion 133
Bibliography 135

5 The Crisis Management Framework and the Single

Resolution Mechanism147
The European Agenda 149
Policy Definition 153
The BRRD in the Context of the SRM 158
The Construction of the SRM 165
On the SRB 167
The SRF 170
The Negotiations 173
The SRM and the SRF 175
Conclusions 184
Bibliography 186

6 The Unbacked Backstop: The European Deposit Insurance

Scheme197
Setting the Principles for Global Deposit Insurance 199
The Revision of the DGS Directive 201
The DGS Directive 211
The Prospects of the EDIS 213
The de Lange Report 219
The Stalemate in the EDIS Negotiations 221
Conclusions 222
Bibliography 224

7 The Reform of the Prudential Framework and the Single

Rule Book229
Setting the International and European Agenda 231
 CONTENTS xi

Basel III and the Commission Proposal 235

The Negotiations 240
The CRR/CRD IV Package 244
A Banking Package to Get the Post-crisis Job Done? 246
Banks Efforts to Review the CRR/CRD IV 248
The Commission Proposal of a Banking Package 255
Negotiating the Banking Package 258
Final Regulation and Directive 261
Conclusions 262
Bibliography 265

8 The Forgotten Pillar: On the Rise and Fall of the Banking

Structural Reform277
On the International Agenda 279
The Liikanen Report and the Commission Proposal 281
The Reform Initiatives in the UK, Germany, and France 283
The Stakeholder Consultations 289
The Commission Proposal 292
The Draft ECON Report 295
The Council Agreement 296
The Stalemate and Failure of the Reform 297
Conclusions 298
Bibliography 302

9 Conclusions311
Bibliography 321

Bibliography323

Index327
 Abbreviations

ABI Italian Banking Association

AEB Spanish Banking Association
AFME Association for Financial Markets in Europe
BaFin German Federal Financial Supervisory Authority
BBA British Bankers’ Association
BCBS Basel Committee on Banking Supervision
BDB Association of German Banks
BDI Federation of German Industries
BEUC European Consumer Organisation
BIS Bank for International Settlements
BPCE Banques Populaires et Caisses d’Epargne
BRRD Bank Recovery and Resolution Directive
BSR Banking Structural Reform
BVR Association of German Cooperative Banks
CEBS Committee of European Banking Supervisors
CEECs Central and Eastern European Countries
CMU Capital Markets Union
CRD Capital Requirements Directive
CRR Capital Requirements Regulation
DG FISMA European Commission Directorate General Financial Stability,
Financial Services and Capital Markets Union
DGS Deposit Guarantee Scheme
DK German Banking industry Committee
DSGV Association of German Savings Banks
EACB European Association of Co-operative Banks
EAPB European Association of Public Banks
EBA European Banking Authority

xiii
xiv Abbreviations

EBF European Banking Federation

EBIC European Banking Industry Committee
EBU European Banking Union
ECB European Central Bank
ECOFIN Economic and Financial Affairs Council
ECON European Parliament’s Committee on Economic and
Monetary Affairs
EDIS European Deposit Insurance Scheme
EFDI European Federation of Deposit Insurers
EFR European Financial Services Round Table
EFSF European Financial Stability Facility
EMU Economic and Monetary Union
EP European Parliament
EPFSF European Parliamentary Financial Services Forum
ESA European Supervisory Authority
ESBG European Savings and Retail Banking Group
ESFS European System of Financial Supervision
ESM European Stability Mechanism
ESRB European Systemic Risk Board
EU European Union
FBF French Banking Federation
FSA Financial Services Authority
FSAP Financial Services Action Plan
FSB Financial Stability Board
G20 Group of Twenty
G30 Group of Thirty
GDP Gross Domestic Product
GFMA Global Financial Markets Association
HLEG High-Level Expert Group
HSBC Hong Kong and Shanghai Bank of Commerce
IADI International Association of Deposit Insurers
IIF Institute of International Finance
IMF International Monetary Fund
IPE International Political Economy
IRB Internal Ratings-Based Approach (Risk Calculation)
ISDA International Swaps and Derivatives Association
LCR Liquid Capital Ratio
LIBA London Investment Banking Association
LTRO Long-Term Refinancing Operation
MEDEF Movement of the Enterprises of France
MEP Member of the European Parliament
MOU Memorandum of Understanding
 Abbreviations  xv

MPS Monte dei Paschi di Siena

NFC Non-financial Company
NSFR Net Stable Funding Ratio
NVB Dutch Banking Association
RBS Royal Bank of Scotland
SGP Stability and Growth Pact
SIFMA Securities Industry and Financial Markets Association in the US
SMEs Small and Medium-Sized Enterprises
SRB Single Resolution Board
SRF Single Resolution Fund
SRM Single Resolution Mechanism
SSB Single Supervisory Board
SSM Single Supervisory Mechanism
TEU Treaty on European Union
TFEU Treaty on the Functioning of the European Union
UEAPME European Association of Craft, Small and Medium-Sized
Enterprises
UK United Kingdom
US United States
VÖB Association of German Public Banks
VZBV German Consumers Association
ZKA German Banking Industry Committee
 List of Figures

Fig. 3.1 Return on equity (RoE), percentage, EU banks 55

Fig. 3.2 Gross non-performing loans as percentage of total gross loans 58
Fig. 3.3 Market concentration. Shares of five largest credit institutions in
total assets (C5) and Herfindahl-Herfindahl Index (HHI) 60
Fig. 3.4 Interbank market dependence, EU large banks, total EU and
Eurozone banks 66
Fig. 3.5 Short-term wholesale funding ratio, as percentage of total items
providing stable funding, total EU 67
Fig. 3.6 News coverage, keywords “banking crisis” and “banking
reform/regulation,” 2007–2018, selected news outlets,
percentage of total news 89
Fig. 3.7 News coverage, keywords “banking crisis” and “banking
reform/regulation” (combined), 2007–2018, selected news
outlets, percentage of total news. Selected EU countries 90
Fig. 4.1 News coverage, keywords “bank supervision” and
“Eurozone crisis,” selected newspapers, percentage of total
news, 2007–2018 108
Fig. 5.1 News coverage, keywords “bank resolution” and “bank
bail-out.” Selected newspapers, percentage of all news,
2007–2018150
Fig. 6.1 News coverage, keywords “deposit insurance” and “debt
mutualization,” selected newspapers, percentage of total news,
2008–2018207
Fig. 6.2 News coverage, keywords “debt mutualization,” selected
newspapers, single countries, percentage of total news,
2008–2018210

xvii
xviii List of Figures

Fig. 7.1 News coverage, keywords “banks’ capital and liquidity

requirements” and “bank reform,” selected newspapers,
percentage of total news, 2007–2018 232
Fig. 8.1 News coverage, keywords “banks too big to fail,” selected
newspapers, percentage of all news, 2007–2018 284
 List of Tables

Table 2.1 Influence conditions, under high structural power 36

Table 3.1 Lobbying expenditures declared by the top banks in the
EU, 2015 85

xix
PART I
 CHAPTER 1

Introduction

We need a new deal between financial regulation and society. A deal in which
financial services are back at the service of the real economy. And at the
service of citizens…. (Barnier 2010)

The atmosphere at the 8th European Financial Services Conference in

April 2010 was rather tense. The call for a “new deal” by Commissioner
Barnier, head of the directorate on financial services’ regulation in the
European Union (EU), did not bode well for the representatives from the
European banks and financial firms present in the room. Those bankers
and financiers were among the principal signatories of an old tacit deal,
whose sudden and violent disruption started in the second half of 2007, in
what the International Monetary Fund (IMF) labeled as the worst finan-
cial crisis since the Great Depression (IMF 2008: 4). Outside the BNP
Paribas Fortis Auditorium, the global financial turmoil was still unfolding
and triggering in those same months the outburst of the Eurozone sover-
eign debt crisis. The dominant regulatory philosophy, which drove the
extraordinary expansion of the financial markets between the US and the
EU from the 1990s onward, turned against the same policy communities
which nurtured it. Governments, regulators, and even market incumbents
questioned the excessive confidence in a general market-led approach,
dominant in the US and UK regulatory infrastructure, bringing to the
liberalization and expansion of the international financial markets. An

© The Author(s), under exclusive license to Springer Nature 3

Switzerland AG 2021
G. Montalbano, Competing Interest Groups and Lobbying in the
Construction of the European Banking Union,
https://doi.org/10.1007/978-3-030-65425-2_1
4 G. MONTALBANO

optimistic reliance on the financial markets’ self-discipline and benefits

favored a spectacular growth of increasingly risky and remunerative busi-
ness (Foster and Magdoff 2009; Posner 2009). An essential premise for
such a mounting disaster was the spread of a “market-based” banking
model, defined as the dependence of the banks’ business and profits,
including core retail activities, in the financial markets (Hardie and
Howarth 2013: 24–27). Market-based and investment banking developed
in parallel with the construction of an EU single market in financial ser-
vices and the Economic and Monetary Union (EMU). In those years of
monetary and financial integration, the majority of EU States differently
experienced a growth in the financial services compared to their gross
domestic product, based on the banks’ increasing reliance on the securiti-
zation activities and other structured products, which boosted profits
together with the debt levels. The expansion of cheap consumer credits
and the development of private indebtedness provided a temporary legiti-
macy of the financialization process (Epstein 2005; Duménil and Lévy
2004; Abdelal 2007), by forging the indebted governments and citizens
as new main characters of a financial and private Keynesianism (Crouch
2009; Bellofiore 2012, 2013; Bellofiore and Halevi 2010). In the run-up
to the crisis, banks from Germany, the UK, and Northern countries fun-
neled their credit flows into the euro-periphery, fueling its private indebt-
ment and crucially contributing to deepening the structural economic
divergencies within the Eurozone (Tooze 2018: 101–6). At the same
time, the growth in consumption and the real estate boom in Southern
Europe were premised on the increasing exposure of the domestic banks
to the international financial markets, the rapid de-industrialization of the
national economies, and the related deterioration in the current account
balances (Bellofiore et al. 2011; Lindner 2013; Celi et al. 2017: 69–70,
101–106). The outburst of the global financial crisis suddenly interrupted
the financial flows and the banks started to cut their riskier exposures. The
economically weaker countries and their banking sectors in Europe were
left to sink in the absence of a common fiscal safety net, triggering a large-­
scale sovereign debt crisis and recession, which would amplify the macro-
economic asymmetries among Eurozone countries. The fragile
financial-based order underpinning the EMU collapsed, revealing the
structural and institutional flaws of the Eurozone. A huge bill to pay was
then presented to the most vulnerable citizens and social groups across
Europe. The deal between policy-makers and bankers waned and the trust
toward finance eroded.
 1 INTRODUCTION 5

As the states heavily intervened in US and EU Member States to bail

out defaulting banks with taxpayers’ money (Grossman and Woll 2014;
Woll 2014; Culpepper and Reinke 2014), the financial sector’s responsi-
bilities came to the spotlight of the public opinion. The privileged and
behind the scenes relationship with national and European policy-makers
was suddenly disrupted. In this way, the global turmoil determined a legit-
imacy crisis of the previous market-based financial governance (Helleiner
2010, 2014: 94–100; Helleiner and Pagliari 2010, 2011; Baker 2010),
leading to a deep re-orientation of the international financial regulatory
community.
In the peculiar case of the EU, the banking crisis threatened the same
viability of the EMU and the prospects of European integration. The
impact of the US-subprime crisis in Europe unveiled the inner tensions
resulting from the design of the monetary union. The Eurozone integra-
tion was premised in the problematic coexistence of the common cur-
rency, the liberalization of capital markets and the competition of national
banking systems embedded in variegated public/private patterns of capi-
talist developments, without a centralized supervisory and crisis manage-
ment authority, and the lack of a Europeanized lender of last resort
function to compensate the loss of monetary policy at home (Schoenmaker
2011; Toporowski 2015). The common currency narrowed the economic
sovereignty of the Member States, while incentivizing a market-led provi-
sion of cheap credit and the expansion of securities markets. Likewise, the
enhanced international capital mobility and the loss of monetary authority
made the States’ competitiveness and financing needs increasingly depen-
dent on financial markets, leaving them with no other adjustment strategy
than the internal devaluation. In such a context, the national banking sec-
tors expanded their activities and profits thanks to the favorable market
conditions created by the monetary union, capital liberalization, and the
building up of the Single Market in the Financial Services, fostering the
competitive positions of cross-border firms (Bieling 2006; Bieling and
Jäger 2009). Thus, the compromises and loopholes in the building up of
the EU financial regulatory framework unfolded through the conflicts
among national strategies of restructuration and the interests of
transnational-­oriented constellations of actors (Mügge 2006, 2010).
In such a process, the Member States’ authorities protected and incen-
tivized the domestic-oriented financial firms’ expansion under nationally
fragmented supervisory authorities and regulatory discretions (Quaglia
2010; Epstein and Rhodes 2016; Epstein 2017: 30–34). Thus, domestic
6 G. MONTALBANO

banks developed in symbiosis with national authorities exploiting the

opportunities opened by the EMU, while the States became increasingly
subjected to the international markets, being deprived of the monetary
authority, without a correspondent lender of last resort, a macroeconomic
and fiscal authority, and a common supervisory infrastructure at the EU
level (Schoenmaker 2011, 2013: ch. 1). From 1999, the development of
financial markets and products in a new competitive race between US and
European banks prompted the concentration of risks and opened the
channels of potential contagion in the Eurozone, bolstering the interde-
pendence and reciprocal vulnerability of States and banks. The European
banks came to internationalize themselves, while remaining rooted in the
respective States as a last resort guarantee against the systemic accumula-
tion of financial risks, which then became implicitly collectivized (Epstein
and Rhodes 2014: 9). The competition among EU banking interests nur-
tured the expansion of domestic financial firms, as well as cross-border
champions, while feeding those systemic vulnerabilities triggering the
2007/2008 financial crisis in the EU. Such institutional flaws and compe-
tition dynamics interacted in the context of a global credit boom, steadily
inflating the private and public debts in a context of sluggish economic
growth among euro-periphery countries, setting the premises for the ris-
ing current account imbalances within the Eurozone. The banks who
inflated the financial bubble and saw their profits soar in the pre-crisis
years were now the same to be rescued with taxpayers’ money to prevent
the collapse of the European economies. At the center of the global finan-
cial turmoil and its transmission into the Eurozone crisis, the bankers and
their responsibilities became the major target of an international
reform agenda.
Rewriting the banks’ rules soon became the grounding premise for that
“new deal,” which would have to resolve a “double” financial and existen-
tial crisis for the European project. Such a deal took form in a tight EU
reform agenda on all the key aspects related to the existing banking regu-
lation: from the supervision of the credit institutions to their crisis man-
agement and the prudential requirements, up to the protection of the
banks’ depositors and the putting into question of the same bank business
structures. At the height of the sovereign debt crisis, the overhaul in bank-
ing regulation became the basis of a major institutional innovation in
European integration history. The project of a European Banking Union
(EBU) emerged in the first half of 2012 as a major and viable response to
end the Eurozone crisis and fix the flaws in the EMU, which resulted from
 1 INTRODUCTION 7

a cross-border banking integration without correspondent supranational

supervision, resolution, deposit insurance, and financial backstop.
Integrated banking governance in the Eurozone was intended to break
the reciprocal risk transmission links between bank and sovereign debts
and halt the EMU fragmentation. In this way, the prospected deal between
finance and society would have paved the way for the euro’s future and the
same European integration.
The main question of this study can be summarized as follows: what
have been the terms and contents of this emerging “new deal” between
financial regulation and society in the EU? A question inseparable from a
second one: who were the most influential drafters and the actual signato-
ries of such a new deal? What were the key interests and societal groups at
stake in the EU post-crisis reform process and the ensuing design of the
Banking Union?

The Argument
This book addresses the above questions by investigating the interests and
influence of the banking industry in the post-crisis regulatory reform of
the EU banking governance and the overall design of the Banking Union.
The argument here presented is that the élite of banks retained the capac-
ity to condition a new deal between finance and society in Europe,
although in different terms with respect to the pre-crisis one. While
endowed with fundamental structural and lobbying resources to advance
their preferences in the reform process, the banking industry had to face a
politicized regulatory environment, requiring a re-orientation of their
strategies and goals. From one side, the cross-border banking interest
groups engaged in the reform agenda to promote and steer the suprana-
tionalization of financial regulation in Europe, as a fundamental goal that
soon overlapped with those of the EU regulators. On the other side, the
increased policy salience of banking regulation after the crisis opened
unique windows of opportunity for pro-regulatory societal interests and
policy entrepreneurs to sustain a hard-regulatory agenda. In such a con-
text, the bankers’ chances to influence the policy-making process hinged
on their capacity to build up broader alliances at the domestic and
European levels. As it will be shown, European bankers tried to mediate
between two imperatives for the EU policy-makers: (re)regulating the
European financial system, while not disrupting the bank funding chan-
nels and essential functions to the real economy. A vital strategy of the
8 G. MONTALBANO

banking lobbies was that of anticipating and pandering to the reform pro-
cess to either prevent or water down at least the most burdensome mea-
sures. The reform agenda brought to multiple patterns of competition
among banks, depending both on the banks’ business models and then—
as the sovereign crisis was exacerbated—on their being headquartered in
surplus or deficit Member States. The extent and direction of the corpo-
rate influence are thus linked both to public issue salience and to the com-
petitive cleavage set by the crisis.
This study offers an innovative contribution to the academic and policy
debates on the European banking regulation after the crisis from both a
theoretical and empirical point of view. Regarding the former, an original
critical International Political Economy (IPE) approach is designed, which
combines structural power, the collective agency of key socio-economic
groups, and the public salience of regulatory issues as critical determinants
to explain corporate actors’ influence. The structural level defines the inter-
dependence between corporate interests and public authorities in the con-
text of national varieties of capitalism embedded in the European market for
financial services. Such a structure sets the terrain for the collective agency
of conflicting socio-­ economic interests. At this second level, the actors
coalesce into organized interest groups and socio-economic coalitions,
depending on the policy issues at stake, the lobbying resources, and the
transnational and domestic actors’ policy entrepreneurship. Lastly, the influ-
ence of competing socio-­economic groups is crucially affected by the politi-
cal context, here understood as the degree of policy issue salience, shaping
the EU decision-makers’ orientations in the financial regulatory process.
An explanatory mechanism is thus hypothesized to assess the corporate
influence capacity in “hard times,” linking structural factors and the
coalition-­making capabilities with the political salience of financial issues
in the different stages of the policy-making. According to the hypothesis
here tested, the increased public salience of banking regulatory issues
threatens the established private-public regulatory relationships. It offers a
window of opportunity for a broader range of social interests to make their
voice heard, and constrains corporate interests to align with the new pub-
lic authorities’ concerns and goals. During a high policy salience moment,
corporate interests are incentivized to coalesce into broader and more
inclusive interest coalitions if they want to rebuild their influence capaci-
ties. Such a coalition-building depends on structural factors (setting the
grounding inter-sectoral and socio-economic cleavages) and the initiative
of critical corporate policy entrepreneurs, like the trade associations and
 1 INTRODUCTION 9

lobbying groups. They must mediate among the different socio-economic

interests involved to forge unitary policy demands and acceptable public
narratives vis-à-vis the policy-makers.
The geographical and sectoral scope of the coalition shapes the patterns
of influence. The broader the coalition-making capacity at the European
level, the greater can be expected to be the influence over the EU-level
policy-makers, together with the chances for weaker interest groups to get
what is demanded in the reform outcomes. On the contrary, the more the
fragmentation across sectoral and geographical lines, the more will be the
influence capacity for domestic corporate coalitions endowed with massive
structural power resources in the European core economies. In the latter
case, domestic-oriented banking interests from core European economies
are expected to retain more influence, if they manage to put their prefer-
ences in terms of national interest to the eyes of the domestic authorities.
Conversely, when the public salience of regulatory issues is low, corporate
interests have less need to mediate their preferences and can exert a stron-
ger direct influence over the policy outcomes, depending on their struc-
tural power resources. As it will be shown, the interactions among
corporate structural power, the interest groups’ coalition-making capaci-
ties and the public issue salience, can help to explain the achievements and
flaws of the European post-crisis banking governance, integrating the
existing scholarly accounts.
The explanatory framework is applied to a comprehensive historical
analysis, tracing the Banking Union’s development within the broader
context of the EU post-crisis initiatives in banking regulation. An in-depth
scrutiny of the interest groups’ preferences and influence is thus provided
across the main pillars of the EU banking governance and throughout the
whole reform cycle, from the aftermath of the financial crisis until the
finalization of the capital requirements regulation, with the Banking
Package in 2018. The stakeholders’ positions and patterns of influence
will be analyzed in relation to the three policy-making stages here taken
into account, together with the correspondent EU institutions playing the
leading role in them: (1) the agenda-setting; (2) the formulation of the
policy proposal (European Commission); and (3) the negotiations in the
Council and the European Parliament leading to the final legislation.
During the agenda-setting and policy-definition stages of the EU policy-­
making process, interest groups strive to condition the very terms of a
reform initiative. In later negotiating stages, however, their potential influ-
ence is limited to the (often crucial) details of the regulation or, at best,
10 G. MONTALBANO

directed at watering down the whole legislative proposal. Thus, the issue
salience and coalition-making capacities at the different policy-making
stages heavily condition the corporate chances of success in the regulatory
process. The post-crisis reform agenda-setting in banking regulation and
the subsequent Banking Union have been laid down in a high political
salience environment, thus providing a crucial test bench to assess the
behavior and lobbying strategies of a corporate community under stress.

Structure of the Book

The book is structured in two main parts. The first part presents the theo-
retical premises, the analytical framework and the overall competitiveness,
lobbying and issue salience dynamics in the aftermath of the crisis. In the
second part, the analytical framework is applied to five case studies, cover-
ing the main reform initiatives in the EU banking regulation, which have
been linked to the Banking Union’s construction.
Chapter 2 introduces an original critical IPE theoretical framework in
the analysis of the EU financial regulation. First, the chapter offers a review
of the literature on the EU post-crisis financial regulation and corporate
influence, discussing its merits and shortcomings. A critical transnational-
ist approach is thus outlined, built on the Neo-Gramscian literature in
IPE. Structure and agency both shape the emergence of conflicting trans-
national coalitions of socio-economic interest groups and policy-makers.
Structural determinants, lobbying resources, and political factors are
linked together in a three-tier analytical framework to assess the leading
public-private coalitions and their influence capabilities at the EU level.
Chapter 3 offers an overview of the European banking industry between
the global financial turmoil and the sovereign debt crisis outburst. It pro-
vides the essential coordinates for analyzing the case studies, by elucidat-
ing the overall industry’s structural conditions, competitive patterns, and
lobbying resources, together with the public salience of banking issues.
Opening the second part, the first case study of Chap. 4 deals with the
reform of banking supervision in the EU, from the creation of the
European Banking Authority (EBA) up to the implementation of the
Single Supervisory Mechanism (SSM). It is argued here that the European
cross-border banks rode the wave of the post-crisis reform agenda to push
for a supranationalized framework in banking supervision, as their long-­
standing demand.
 1 INTRODUCTION 11

Chapter 5 analyzes the creation of the EU crisis management frame-

work with the Bank Recovery and Resolution Directive (BRRD) and the
ensuing establishment of the Single Resolution Mechanism and Fund
(SRM and SRF). Contrary to the Banking Union’s initial project, it soon
appeared clear that the SSM would not represent the very premise for a
common backstop and burden-sharing arrangement capable of reaching
the ambitious aim to break the bank-sovereign doom loop. A crisis man-
agement model based on the bail-in principle and the prevention of moral
hazard soon emerged as truly second pillar of the Banking Union, meeting
the demands of the banks headquartered in the Eurozone potential credi-
tor countries as well as the interests of cross-border banks.
Linked to the introduction of a common backstop, the harmonization
of the deposit guarantee schemes and the plans for a pan-European deposit
insurance system are analyzed in Chap. 6. In this case, the diverging banks’
risk profiles and deposit guarantee models along domestic lines structur-
ally prevented the European banking industry from speaking with one
voice. The European banking industry, including the cross-border banks,
fragmented along domestic lines and aligned with respective governments.
Thus, compact domestic public-private coalitions emerged, exacerbating
the debate’s polarization along the core-periphery divide and the endur-
ing deadlock in the negotiations.
Chapter 7 traces the banking industry’s role in the reform of the EU’s
prudential requirements, as the basis of a Single European Rulebook for
banks underpinning the Banking Union. It covers from the post-crisis
Regulation and Directive on capital requirements (CRR and CRD IV, in
2013), up to their recent revisions under the “Banking Package” (the
CRR 2 and CRD V, in 2018). The European banking industry united the
efforts to water down the introduction of harsher rules, framing their
opposition by pointing at the supposedly consequential reduction in lend-
ing to the business sectors. A competitive cleavage emerged between
internationalized and domestic-oriented banks around the extent of the
harmonization. Under a high political salience, the banking industry was
defeated in several key demands, with significant capital and liquidity bur-
dens in the new framework. However, cross-border banks obtained a
highly harmonized framework, through the choice of a Regulation as the
legal instrument. Large and smaller European banks managed to water
down, postpone, and shift some of the opposed provisions as supervisory
tools for the competent authorities, to be imposed on case-by-case
situations.
12 G. MONTALBANO

Chapter 8 focuses on the reform on the separation of deposit-taking

from variously trading-related activities. The reform project questioned a
grounding pillar of the modern ‘market-based’ banking system, represent-
ing a fundamental threat to the European financial industry. Moreover,
the issue attracted a relevant degree of salience in the European public
opinion and mobilization from Civil Society groups, soon becoming a
sensible question for both the national and European policy-makers. On
the other hand, the competitive threats resulting from such a proposal
united the European banking industry into a compact and proactive lob-
bying coalition. The prolonged stalemate in the negotiations and the
decline in issue salience allowed the banking industry to obtain its major
success, with the final withdrawal of the proposal in 2018.
The final chapter summarizes the book’s main findings and outlines the
general approach in banking regulation emerging from the post-crisis
reform process. The overall architecture and final provisions of the Banking
Union’s pillars here scrutinized reflect a mediation between the core
demands of European transnational banks and the German/Northern
bloc of domestic banks. Rather than narrowing the scope of financial mar-
kets’ expansion, such a regulatory framework sets the conditions for a new
round of competition at the EU level, through a new level playing field
mainly shaped by cross-border institutions, mediating with domestic-­
oriented banks in the core EU countries.

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 CHAPTER 2

A Critical Transnationalist Approach

to the European Financial Governance

Untangling the knot of the relationships between politics and the econ-
omy, States and markets, public authorities and private actors is a funda-
mental premise to understand the nature of power in the international
arena. Such a task proves particularly challenging in a uniquely complex
and hybrid supranational polity like the EU. The scope, conditions, and
forms of corporate power in the EU policy-making represent a paramount
issue to assess the whole process of European integration and its limits and
prospects. Such an underlying problem is recognized and addressed—
through different lenses—from the competing theoretical approaches in
European integration and financial governance. The same variety of per-
spectives informed the burgeoning literature and continuing debates on
the EU post-crisis banking regulation and the Banking Union. Although
these works already provided comprehensive accounts and in-depth case
studies regarding the European banking governance after the crisis, some
fundamental pieces still lack, which are nonetheless relevant to reconstruct
the overall mosaic.
In particular, as argued here, a focus on the banking industry and its
influence throughout the reform process is needed to fill the gaps in the
story. To this aim, a distinctive theoretical approach is elaborated here,
which intends to overcome the shortcomings and one-sided views on cor-
porate power underlying the prevailing theories and scholarly strands.
While directed at explaining the EU reform of banking regulation, the

© The Author(s), under exclusive license to Springer Nature 15

Switzerland AG 2021
G. Montalbano, Competing Interest Groups and Lobbying in the
Construction of the European Banking Union,
https://doi.org/10.1007/978-3-030-65425-2_2
16 G. MONTALBANO

approach here proposed seeks to provide a comprehensive critical theo-

retical framework for the analysis of European integration and global
governance.
This chapter has three aims and corresponding sections. First, it criti-
cally reviews the theoretical approaches in European integration and the
post-crisis financial reform that are most relevant to the case, by highlight-
ing their merits and drawbacks. Then, taking the cue from the literature’s
flaws, the second part introduces a critical transnationalist approach to
deal with the structural, instrumental, and political power dimensions
across the domestic/supranational levels. Structural determinants, lobby-
ing capacities, and political factors are linked together in a three-tier ana-
lytical framework to assess the leading public-private coalitions and their
influence capabilities at the EU level. Lastly, the research design of this
study is elaborated from the tenets of the theoretical approach. The latter
is thus translated into specific explanatory hypotheses and determinants to
be tested in the selected case studies and then provide a comprehensive
account of the EU banking governance after the crisis.

Beyond the Domestic/Supranational Dichotomy

in the European Integration Theory

The growing scholarly literature on the EU post-crisis financial gover-

nance variously relates to the main theoretical approaches in the European
integration studies. Intergovernmentalist and supranationalist views are
the leading traditional contenders in the field (Schimmelfennig and
Rittberger 2006: 76). A limitation of both the grand theoretical traditions
in the European studies rests in the assumption of a national/suprana-
tional dichotomy, leading to partial accounts of the relationships between
socio-economic interests and policy-makers. States and supranational
actors are alternatively identified as the real drivers of European integra-
tion. As argued here, the latter is a problematic and unfruitful opposition
that can be overcome by focusing on the socio-economic structures and
actors underlying the power asymmetries, conflicts, and compromises
among the European decision-makers.
Realist intergovernmentalism was already well aware of the centrality of
incumbent social and economic interests in shaping the States’ foreign
policy goals in the history of European construction (Hoffmann 1982:
26–29; 2019 [1995]; Grieco 1996; Milward 2000). However, only with
 2 A CRITICAL TRANSNATIONALIST APPROACH TO THE EUROPEAN… 17

the development of its liberal version, the intergovernmentalist approach

started to open the “black box” of national preference formation. Thus,
liberal intergovernmentalism looks at the distributional conflicts and
sector-­specific interests of powerful domestic socio-economic groups as a
crucial determinant in the formation of the State interests (Moravcsik
1993: 481; 1997: 538–541; 1998: 18, 38; Moravcsik and Schimmelfennig
2009: 69–70). However, the rationalist framework underpinning
Moravcsik’s theorization reduces the government as a unitary aggregator
of majoritarian sectoral societal inputs. Interest groups and social demands
are thus treated as mere providers of domestic policy inputs to be pro-
cessed by a State machine whose relative geopolitical/economic power
determines their successful upload in the EU agreements and legislation.
The conditions empowering certain socio-economic groups and the
policy-­makers’ selective responsiveness remain outside the scope of liberal
intergovernmentalism. This view overly exemplifies the social and political
dynamics underlying the European integration process (Bieler and Morton
2001: 15–17; Van Apeldoorn et al. 2003: 25; Ryner and Cafruny
2017: 18–23).
Overcoming Moravcsik’s “unnecessarily reductive notion of domestic
politics” is one of the distinctive objectives of the “new intergovernmen-
talist” approach, designed as a refinement of intergovernmentalism in
light of the historical path of European integration after the Maastricht
Treaty. The proponents of this new version of intergovernmentalism thus
defend an in-depth focus on the preference formation process. New inter-
governmentalism thus takes into account the end of the “permissive con-
sensus” in European politics, the role of contestation movements, and—in
general—the patterns of state-society relationships and institutionalization
(Bickerton et al. 2015a, b; Puetter 2014). As noticed in critical reviews,
however, the new intergovernmentalists “do not spell out a view of how
state-society relations are to be understood” (Bulmer 2015: 296). Thus,
the politicization of the European policy issues is not explained
(Schimmelfennig 2015b: 727–8) and the role of non-State actors is over-
looked (Baird 2017).
Both “old” and “new” intergovernmentalisms thus fall short in provid-
ing a theorization of the State preference formation capable of accounting
for relationships between conflicting socio-economic demands and politi-
cal élite interests within the EU multilevel polity. Such a view crucially
neglects the coalition-making capabilities and venue-shopping strategies
of cross-border actors forging transnational coalitions to exploit
18 G. MONTALBANO

legitimacy-input demands and conflicts among relevant domestic, supra-

national, and international regulatory authorities. The inter-State power
asymmetries are then isolated from power asymmetries among transna-
tional socio-economic interests within a supranationalized polity,
like the EU.
State-centrist assumptions inform as well, together with its drawbacks,
the domestic-centered approaches in European financial integration.
Incumbent domestic financial interests and the related institutional fea-
tures of national financial systems have been thus protagonists of a “bat-
tle” over the integration of the European capital markets, whose outcome
was determined by the relative States’ power (Story and Walter 1997:
275–81). The European countries hosting the large financial centers—
notably the UK, Germany, and France—and the US have been identified
as true Master of Financial globalization (Kapstein 1994; Helleiner 1996;
Drezner 2008). In particular, the German and British financial systems
have been taken as theoretical references for two dominant and contrast-
ing varieties of credit supply: the European Continental banking-based
model and the Anglo-Saxon capital market-based one, toward which the
former tend to converge (Zysman 1983; Allen and Gale 2000: 4–5; Deeg
1999, 2010: 311–12). The ideal-typical dichotomy in financial gover-
nance mirrors the general opposition between coordinated and liberal
market economies in the Varieties of Capitalism (VoC) literature, referred
to two equilibria for the firms’ coordination problems in their institutional
environment: the former based on non-market strategic interactions
between private and public actors, and the latter grounded on the con-
trary in market-driven contractual relations (Hall and Soskice 2001: 8–9;
2003; Hall and Gingerich 2004; Hancké 2009: 2; Hall and Thelen 2009:
8). Such a framework reduces the conflicts among different patterns of
capitalism in reified binary terms, while it overshadows the overlap and
hybridization of both market-liberal and bank-coordinated elements in
the process of European financial markets’ integration (Hay 2005;
Pontusson 2005; Hancké et al. 2009: 277; Macartney 2011: 455–58).
Putting into question the same distinction between competing market-
and bank-based models, Hardie and Howarth highlighted the centrality of
a “market-based” business strategy and corporate governance in the
European bank lending before the global financial crisis (Hardie and
Howarth 2013: 24–27).
Focusing on the entrenched regulatory philosophies at the domestic
authorities’ level, Quaglia counterposed a British-led “market-making”
 2 A CRITICAL TRANSNATIONALIST APPROACH TO THE EUROPEAN… 19

(principle-based) to a German-led “market-shaping” (rule-based) advo-

cacy coalition in the construction of the single market of financial services
(Quaglia 2010a: 1010–12; 2010b: 11–23). While the pre-crisis decade
saw a predominance of the Anglo-Saxon “market-making” coalition of
States in the European regulation, a Continental “market-shaping” coali-
tion rose in the making of the reform agenda after the global financial
crisis (Quaglia 2012: 530). Such an adaptation of the advocacy-coalition
framework (Sabatier 1998) shed light on the long-standing systems of
beliefs shared among domestic authorities. However, it falls short in
accounting for the overlapping of the two regulatory approaches in con-
crete reform initiatives, as well as for changes in the composition of the
respective coalitions and the same regulatory ideas underpinning them. As
Quaglia well recognized, such an “account suffers somewhat from meth-
odological nationalism in that it presents an oversimplified version of
countries positions, whereas states are not monolithic actors” (Quaglia
2012: 526). In her empirical analyses, the same author showed well how
UK, Germany, and France adopted both “market-making” and “market-­
shaping” strategies to defend the respective domestic financial interests
before and after the global financial crisis.
Focusing on the societal conditions of State preference formation,
domestic-centered approaches thus generally treat corporate groups as
providing the contents of the governments’ positions. Nevertheless, their
changing interests, conditions of empowerment, and lobbying strategies
beyond the domestic borders are substantively neglected (Schirm 2009,
2018, 2019). Thus, although providing relevant empirical contributions,
intergovernmentalist studies in the post-crisis European financial integra-
tion similarly focused on coherent domestic blocs of State and interest
groups, thus neglecting the relevance of the transnational industry and
supranational policy-makers (Westrup 2007; Quaglia 2008a, b; Hennessy
2014; Spendzharova 2012; Perez and Westrup 2010; Schirm 2011, 2013;
Maris and Sklias 2016). Even here, the limits of the domestic-centered
framework come to the surface in the empirical analysis. For example,
from a “systemic-realist” perspective, Buckley and Howarth focused on
the dominant financial powers and their incumbent banking interests in
their struggle to “to upload their model to the EU and international levels
to gain and preserve comparative advantages” (Buckley and Howarth
2010: 121; Zimmermann 2010; Buckley et al. 2012: 113). However, the
same authors partly enlarged their visual and showed the continuing lob-
bying capacity at the transnational level of the European financial industry
20 G. MONTALBANO

in the case of the EU regulation of hedge and private equity funds, the
Alternative Investment Fund Managers Directive (AIFMD) (Buckley and
Howarth 2011: 140–41). Thus, it is not clear why—according to these
perspectives—in some cases, an inter-State logic of power prevails, while
the lobbying capacity of a transnational industry coalition takes center
stage in other cases, even re-empowering the City of London in the after-
math of the crisis. Did the conflicts and mediations within the European
financial industry, at both geographical and sectoral levels, matter and to
what extent? The intergovernmentalist literature leaves us with no answers
to this question.
In the same fashion, State-centered accounts of the European Banking
Union and its main pillars focus on the divergent interests and power
asymmetries among core EU Member States, as reflecting their domestic
banking systems and market incumbents (Howarth and Quaglia 2013,
2014, 2015, 2016a, b, 2017; Gren et al. 2015; Donnelly 2014, 2016,
2018a, b; Deeg and Donnelly 2016; Spendzharova 2014; Schimmelfennig
2015a; Lombardi and Moschella 2016). These contributions shed light
on the conflicting EU States’ preferences, goals, and achievements that led
to the European Banking Union’s (EBU’s) suboptimal outcomes and its
incomplete institutional setting. However, such approaches face more dif-
ficulties in explaining the emergence of the EBU agenda and the (even
partial) transfer of substantive powers at a supranational EU level, seem-
ingly running against the initial interests of core creditor countries, like
Germany.
Well aware of such difficulties, Howarth and Quaglia offered the most
comprehensive account of the State interests and outcomes of the EBU,
by originally combining the intergovernmental perspective with function-
alist arguments (Howarth and Quaglia 2016a: 14–15; for a similar synthe-
sis of approaches, see Quaglia and Spendzharova 2017). In particular, the
rationale of the EBU is explained with the recourse to Schoenmaker’s
financial trilemma. According to the latter, it would be impossible to hold
simultaneously financial stability, cross-border banking, and national
financial supervision. Any two of the three objectives can be combined,
but not all three (Howarth and Quaglia 2016a: 17; Schoenmaker 2011,
2013: 6–7). The functional pressures unleashed by the extent of the
European banking integration and the failures in coordination among
national supervisors in the monetary Union constituted an “inconsistent
quartet” (Howarth and Quaglia 2014: 126; 2016a: 19–20) that pushed
for the supranationalization of banking regulation. The latter met the
 2 A CRITICAL TRANSNATIONALIST APPROACH TO THE EUROPEAN… 21

resistances and diverging interests of core European powers, rooted in the

configuration of the respective national financial systems, bringing to a
fundamentally intergovernmental profile of the EBU (Howarth and
Quaglia 2015, 2016a: 21–23). Although the authors episodically include
the Commission’s positions, the European Central Bank (ECB), and
cross-border banks, the role of such actors falls outside the lens of their
theoretical approach. Thus, the relative influence of conflicting socio-­
economic interests’ coalitions vis-à-vis national and supranational authori-
ties is neglected. The societal dimension, however, is relevant to assess if
and how the functional pressures translated into the preference formation
and empowerment of those domestic/EU-wide interest groups vis-à-vis
the European policy-makers.
Differently, from a “realist-institutionalist” approach, Donnelly inter-
prets the EBU as a crucial element in a post-crisis European economic
governance mirroring the dominance of Germany and its strategic inter-
ests (Donnelly 2018a). The EBU would represent a pivotal episode in the
post-crisis process of “Germanisation” of Europe (Beck 2013). Thus, the
EBU reflected Germany’s preferences as the great European power, rather
than restraining them, thus bringing to a lacking institutional structure
that cannot ensure financial stability (Donnelly 2018a: 180, 184–186).
However, such a realist view fails to account for the mediations and con-
cessions by the German government, like in the case of the Single
Supervisory Mechanism, as the same author acknowledges (Donnelly
2018a: 130–31). While taking Germany as the pivotal country, liberal
intergovernmentalist accounts pointed at the divisions within the German
domestic interests to explain its need to compromise (Howarth and
Quaglia 2016a: 22–23). Caught between the call of preserving the exis-
tence of the Economic and Monetary Union (EMU) and the fears of
being the major net contributor of a “transfer Union” at its taxpayers’
expense, Germany found itself in the position of a “reluctant hegemon” in
the EU post-crisis economic governance (Paterson 2011; Bulmer and
Paterson 2013; Bulmer 2014; Schweiger 2015; Dyson 2015). However,
in order to better assess the extent and contents of the “hegemonic” func-
tion exerted by Germany, its domestic interests need to be also framed in
the broader context of European-level conflicts between corporate and
non-corporate actors, pointing at the socio-economic content of hege-
mony (Montalbano 2020). Moreover, the relationships between cross-­
border German corporate interests and the European supranational
22 G. MONTALBANO

policy-making institutions, and their conflicts with the German govern-

ment, are overlooked in such a domestic-centered view.
In their different variants and combinations, intergovernmentalist
approaches in the EU politics show fundamental limitations in their
accounts of the European post-crisis financial governance. These short-
comings are rooted in their restricted focus on domestic interest groups
and related patterns of influence, overlooking the transnational dimension
of corporate agency and public-private relationships.
Conversely, supranationalist accounts treat the European-level decision-­
makers and interest groups as the key agents in the integration process. In
the neofunctionalist theory, for example, the Commission is the critical
collector of the societal demands for cross-border markets integration,
harnessing them toward the expansion and deepening of European coop-
eration. Transnational-oriented interests are thus reduced to the material
“vehicles” of the functional spill-over pressures and “transaction costs”
which fuel the integration engine (Haas 1958: ch. 8; Sandholtz and
Zysman 1989: 113–119; Niemann and Schmitter 2009: 49–50). A similar
reductionism occurs in the subsequent theoretical refinements of neo-­
functionalism (Stone Sweet and Sandholtz 1998; Stone Sweet et al. 2001).
According to Stone Sweet and Sandholtz, the emerging “transnational
society” of market actors constituted the main driving force in Europe’s
institutionalization, in a process that gradually reduced the control of the
Member States’ governments (Stone Sweet and Sandholtz 1998: 4–5,
11–15). Increasing “transnational exchanges” are thus taken as the explan-
atory variable of the institutionalization of the European space. In this
way, this perspective neglects the concrete interests, coalitions, and ideas
underlying conflicting visions of the European integration by the transna-
tional actors (Fliegstein and Stone Sweet 2001: 34–36; Stone Sweet et al.
2001: 18–20). Departing from the functionalist assumptions, historical
institutionalists looked at path-dependence dynamics. According to the
latter, established institutions produce positive feedbacks triggering either
their conservation or cumulative changes, even unleashing outcomes
unintended by their creators and/or principals (Pierson 1996, 2004;
Stone Sweet et al. 2001). However, such a reliance on the spill-over and
path-dependence mechanisms move to the background the agency of con-
flicting transnational and domestic economic actors, which are assumed to
be the first driving forces of the EU decision-making (van Apeldoorn et al.
2003: 22–26).
 2 A CRITICAL TRANSNATIONALIST APPROACH TO THE EUROPEAN… 23

Distancing themselves from the so often criticized automatism of the

spill-over mechanism, revised versions of the neofunctionalist theory
maintain a developmental logic in which the agency of the transnational
actors is obscured, together with the power relationships among private
and public interests. While including the relevance of interest groups in
the theoretical approach, neofunctionalist- and institutionalist-like
accounts of the European economic and monetary integration treated
transnational corporate groups as material inputs gathered and steered by
European policy-makers and experts to deepen supranationalization
(Mutimer 1989; Tranholm-Mikkelsen 1991; Corbey 1995). In his neo-­
neo-­functionalism, Schmitter conceptualizes the possibility of strategic
responses different from spill-over are acknowledged, even in the form of
a disintegrative “spill-back.” In the end, however, the functional pressures
unleashed from regional-level rules are taken as the driving forces of
Europeanization “to the point that they begin to overshadow the opinions
and actions of national governments, associations and individuals”
(Schmitter 1970: 850–55; 2004: 26). Similarly, in her work, Niemann
breaks with the cumulative assumptions of neo-functionalism, by focusing
on the relationships between spill-over/spill-back mechanisms and the
actors’ agency (Niemann 2006: 24–26, 30–31). Therefore, the functional
spill-over is deemed to require the agents’ perceptions of the “plausible”
and “compelling” character of those same functional pressures in order to
act upon them (Niemann 2006: 31). A lacking conceptualization of power
characterizes, at the same time, the subsequent forms of political, social,
and cultivated spill-over identified by the author (Niemann 2006: 36–37,
39–42, 43–44).
Looking at the construction of the EMU and Single Market in Financial
Services, in their works Posner and Jabko highlight the entrepreneurship
of the Commission in shaping the same industry associations and related
market ideas as its proper Europeanized constituency in the making of the
Single European market for financial services (Posner 2005, 2009; Jabko
2006). Although these studies fruitfully shed light on the Commission’s
policy entrepreneurship in decisive moments of the European integration,
they assume a rather passive role by socio-economic organized interests,
overlooking the possibility of their proactive role in the agenda-setting
and policy-making process. Moreover, by treating cross-border interests as
the Commission’s proper constituency, these approaches neglect their
continuing need to build alliances with core EU Member States’ govern-
ments as crucial agents.
24 G. MONTALBANO

Along this supranationalist stream, the post-crisis European economic

governance has been read as a case for neo-functionalism and historical
institutionalism. According to the former, the Commission exploited the
“functional dissonances” in the lacking EMU design that emerged after
the crisis to foster a far-reaching reform agenda and to expand its powers
over the Member States (Niemann and Ioannou 2015; Gocaj and Meunier
2013; Schimmelfennig 2014; Vilpišauskas 2013).
In line with functionalist arguments, the EBU has been explained as a
result of the policy entrepreneurship of the Commission and the ECB,
overcoming Member States’ initial oppositions (De Rynck 2016;
Schimmelfennig 2016; Epstein and Rhodes 2016a; McPhilemy 2016;
Glöckler et al. 2017; Epstein 2017: ch. 5; Nielsen and Smeets 2018).
Unlike the intergovernmentalist works, these accounts unveil fundamental
dynamics underlying the EBU agenda-setting, the ceding of authority by
core Eurozone Member States over their banks, and the ensuing concen-
tration of supervisory and crisis management powers at the supranational
level. On the flip side, they either ignore or far less useful in explaining the
lacking pillars and incomplete achievements of the EBU. Moreover, most
of these accounts either neglect or explicitly negate a significant role to the
European banks and other interest groups in the making of the EBU. For
example, De Rynck argues that “banking has retrenched to national mar-
kets since 2008 and lobbying by cross-border banks in 2012 was not dif-
ferent from earlier years” (De Rynck 2016: 120). However, he does not
provide evidence for this claim. A noticeable exception is represented by
the contributions of Epstein and Rhodes, which focused more on the
dynamics of “shifting loyalties” between cross-border banks and the home
states. According to two scholars, the EBU represented a kind of consen-
sual divorce between national banking champions and their respective
government authorities, due to the fragmentation of the European finan-
cial markets and the conflicts among national authorities in the cross-­
border entities’ supervision from the global financial turmoil up to the
sovereign debt crisis. Putting to an end the historical symbiotic relation-
ship with State power, the transnational banks then strategically became
the key social allies of the Commission and the ECB in the construction of
the EBU (Epstein and Rhodes 2014: 13–15; 2016a: 431; 2016b; 2016c:
100; Epstein 2017: 150–52). Nevertheless, the authors did not scrutinize
what they elsewhere call the “micro-level processes” (Epstein and Rhodes
2016a: 417) of such a historic severing of the ties between States and large
banks: that is, the specific interests, lobbying strategies, coalition-building,
 2 A CRITICAL TRANSNATIONALIST APPROACH TO THE EUROPEAN… 25

and influence of these actors in the agenda-setting and policy-making

phases of the reform of financial supervision in the EU from 2009 to the
EBU. Therefore, the alliance between cross-border interests and suprana-
tional EU institutions pushing for a full-fledged Banking Union is mostly
assumed rather than proved systematically.
Lastly, some constructivist-inspired studies went as far as explaining the
post-crisis European financial governance as a result of ideational capture
by a German-led ordo-liberalism (Young 2014; Matthijs 2016;
Nedergaard and Snaith 2015; Nedergaard 2018). According to Schäfer,
for example, the ordo-liberal concept of severing the sovereign-bank links
has been exploited strategically by the Commission and the Southern
Member States. Hence, they compelled the German government to accept
it: “the need for argumentative consistency made it vulnerable to demands
for further mutualization” (Schäfer 2016: 962). However, it is not clear
how such an “argumentative consistency” could have shaped as such the
Merkel government’s preferences, irrespective of any consideration to the
interests of its domestic social and economic constituencies. Nor can it
explain why the German government opposed the direct supervision of its
small banks, as well as the institution of a full-fledged backstop mecha-
nism. By reducing power relationships and conflicts to the discursive
sphere, such constructivist approaches systematically neglect the material
bearers of economic ideas, together with the vested interests underpinning
them. On the contrary, other scholars noticed the “pragmatic” adaptation
of the German government’s ordo-liberalism ideas in the euro-crisis (Feld
et al. 2015; Beck and Kotz 2017). However, little attention has been dedi-
cated to the socio-economic basis of the competing economic policy ideas
at play in the EU post-crisis reform and their strategic uses by competing
groups to win the policy-makers’ consensus.
In sum, State-centered and supranationalist approaches—in their dif-
ferent theoretical versions—generally assume the theoretical relevance of
domestic/cross-border interest groups’ role, while failing to conceptual-
ize their agency and forms of public-private relationships in the multilevel
governance framework of the EU. Similarly, eclectic accounts combining
intergovernmentalist and neofunctionalist arguments looked at the inter-
actions between core Member States and supranational institutions,
excluding from their analytical framework the agency of organized inter-
ests both at the national and European levels (Verdun 2002; Wolf 2002;
Heipertz and Verdun 2010; Krampf 2014).
26 G. MONTALBANO

The highlighted shortcomings in the intergovernmental/supranation-

alist streams point to the theoretical usefulness of an approach focusing on
public-private power relationships across the EU’s multilevel framework.
Responding to a similar need, the “governance turn” in the European
studies aimed at shaking off the grand theorizing traditions to look at the
different policy communities and networks of decision-makers, bureaucra-
cies, and interest groups in the policy-making process (Kohler-Koch and
Rittberger 2006). Governance models refer to the decentralization of
authority into differentiated subsystems of policy-making, promoting the
selective access to the societal actors through channels and advancing a
different criterion for the EU legitimacy (Kohler-Koch 1999: 16–19).
Similar approaches lack any underlying theorization of power dynamics
among critical European policy-makers and organized groups. The net-
work governance analysis depicts a fragmented and sectional EU gover-
nance where any hierarchy and interconnection among the policy issues
have been deliberately removed. Without a proper account concerning the
relevant power relationships among EU-wide economic interests, it is
hardly possible to detect the conditions favoring the constitution of a
more or less structured policy network, restricting this model as a merely
empirical-descriptive instrument. Such limitations are linked to the same
governance “ideology,” based on the reduction of politics, as the moment
associated with struggles among competing visions of society and social
purposes, to a narrow problem-solving form of policy-making (Hix 1998:
34; Kohler-Koch 1999: 23–24; Majone 1996).
As argued here, a transnationalist framework is the best fitted to com-
prehend the relevant insights of the above strands of researches, while
framing them in a more embracing theorization of the power relationships
between public and private actors across the domestic and supranational
levels of the European politics.

A Critical Transnationalist Framework

The critical transnationalist framework here advanced builds on the Neo-­
Gramscian literature in International Relations and IPE to provide a com-
prehensive theoretical account for the structural, instrumental, and
contextual conditions of corporate power in European politics (Cox 1983,
1987; Gill 1993, 2003; Bieler and Morton 2001; Overbeek 2000; Van
Apeldoorn 2004; Talani 2016; Ryner and Cafruny 2017: 30–57). The
proposed approach looks at the dynamics of empowerment and collective
 2 A CRITICAL TRANSNATIONALIST APPROACH TO THE EUROPEAN… 27

agency of conflicting socio-economic interests under the structural pres-

sures of capitalist competition as the fundamental driving forces of the
European integration process (Bieler and Morton 2001; Gill 2003; Van
Apeldoorn 2002a, b, 2004). The analytical focus thus shifts to the com-
peting transnational coalitions to which key socio-economic groups give
rise, depending on their structural, instrumental, and political power
resources. Such coalitions aim at winning the policy-makers’ consensus to
shape the dominant forms of European economic development. The con-
tent of these competing coalitions at play is conceptualized in terms of
conflicting “hegemonic projects,” defined as the fundamental tenets and
goals of a socio-economic model reflecting the vested interests of social
groups against others and aiming at ensuring the political consensus
required to translate them into institutions, regulation, and policy out-
comes (Van der Pijl 1998: 51; Van Apeldoorn 2002a: 29–31; Macartney
2011: 36; Ryner and Cafruny 2017: 55–56). According to a Gramscian
understanding of power, hegemony is thus conceived as the universal
political agency assumed by a particular socio-economic class interest,
based on a specific combination of force and consensus-building (Gramsci
2007: 1583–84). Organized class interests striving for hegemony aims at
establishing an enduring order as a condition to stabilize and expand the
corresponding class power (Cox 1983; Arrighi 1993: 149–151).
Unlike other theorizations in the European studies, the object of the
analysis shifts to the socio-economic forces and their capacity to gain polit-
ical clout by building alliances with critical policy-makers along the differ-
ent stages of the policy process. Therefore, Member States and
supranational institutions are disaggregated and reframed in terms of
coalitions of organized groups and policy-makers competing against each
other to control the production of norms and the patterns of wealth pro-
duction and distribution. Here the “transnational” dimension refers both
to the cross-border dimension of economic interdependence and the mul-
tilevel polity system of the European construction in which competing
socio-economic groups articulate their interests and collective agency
(Cox 1987: 253–65; van Apeldoorn 2004; Morton 2007: 123–25).
Rather than excluding the domestic level, such perspective points at the
capacity of transnational pressures, actors, and ideas to exert influence
simultaneously across key governments, regulatory agencies, and suprana-
tional institutions. The determinants of the integration process are thus
framed in a three-level analytical framework, which links together the
structural, collective agency and political power dimensions of the
28 G. MONTALBANO

competing socio-economic coalitions. In what follows, we will look at the

three levels and their interactions.
First, the structural level defines the grounding power resources, class
position, and interdependence of different socio-economic groups, rooted
in their essential economic function within the social system (Wright
2005). As a basic tenet of Neo-Gramscianism, capitalism is considered the
grounding logic of power structuring society, consisting in the asymmetric
and exploitative relationship between social classes owning the propriety
and actual control of the means of production of value and wealth against
others which are deprived of such control: a dynamic unleashing the indef-
inite expansion of capital as an end in itself (Cox 1987: 51, 55–57; Arrighi
2010: 34; Harvey 2007: 28–35). In general terms, structural power refers
to the degree of dependence of the public authorities and society at large
on a specific subset of socio-economic actors. In a capitalist system, corpo-
rate actors retain structural power over policy-makers to the extent that
their motives and operations affect essential social functions and policy
goals for the collectivity (Lindblom 1980: 172–175; Przeworski and
Wallerstein 1988; Gill and Law 1993). Among capital holders, those pri-
vate actors who control critical sources of money capital as bank credit and
financial investments play a crucial economic role, by providing payment
services, deposit-taking, lending, and sovereign financing. The market
position, size, complexity, and interconnectedness of financial institutions
qualify their systemic relevance for other business sectors and the society
as a whole, at different domestic, European, or global scales. The compa-
nies’ systemic importance for the social system makes their grounding
interests constraining the public authorities’ behavior before any actual
exercise of direct lobbying pressures. However, rather than having a uni-
lateral direction from private interests to public authorities, structural
power entails mutual dependency (Culpepper 2015: 399–400). Capitalists
need both ordinary and extraordinary policy and institutional interven-
tions by the public authorities to ensure their operations and even survive
in crises, as the post-crisis bailouts showed. Public power provides thus the
essential institutional and normative architecture in which private corpo-
rate power can take form. The more the public authority retains the option
of acting even against corporate actors’ interests, the more the relationship
is balanced and the former is not captured. The logic of capitalist competi-
tion in increasingly interconnected markets at a transnational scale shapes
the distinctive forms of interdependencies between public authorities and
corporate interests.
 2 A CRITICAL TRANSNATIONALIST APPROACH TO THE EUROPEAN… 29

According to Woll, the bailouts in the aftermath of the crisis revealed

the banks’ capacity to constrain the policy-makers’ choices through the
collective “inaction,” rather than organized lobbying (Woll 2014a, b,
2016). However, structural power cannot serve alone to shape specific
regulatory outcomes without corporate collection action. Moreover, it
tells us little regarding the specific capacity of intervention by the public
authorities to reshape the same terms of the structural interdependence
with those same systemic financial institutions. As a social product of past
instrumental and political power, structural power is institutionally repro-
duced, accrued, or reduced by the public power capacity.
Whereas structural power expresses the ground class position, interests,
and resources of the different socio-economic groups, the collective action
dimension is crucial to ensure that public authorities steer markets and
their regulatory institutions in the desired way. At this second level, corpo-
rate and non-corporate actors formulate their demands and organize
themselves to overcome collective action problems and shape their politi-
cal and institutional environment. The collective agency requires the
mediation of individual and possibly contrasting preferences into a sectoral
or more general class interest capable of mobilizing actors toward a com-
mon goal (Gramsci 2007: 1583–84; Gill 2003: 51–53; Talani 2017:
27–29). Corporate and non-corporate interests face different collective
action problems in translating their individual preferences into shared
demands and then into legislative and regulatory outcomes.
From the corporate perspective, firstly, a degree of coordination is
needed to win the disruptive pressures of short-term individual inter-­
firms’ competition that, as such, can undermine their same collective
interest in the survival of the market structures in which they operate
(Bowman 1982: 572–4; 1989: 2–5; Traxler 2002: 158). The need to
establish the terms of the competition is essential in pursuing the capitalist
self-interest, to prevent self-destructive dynamics unleashed by the same
logic of competition and incentives to free-riding that threatens the whole
class of capitalists (Bowman 1982: 579–80; 1998: 307–8). Following
Adam Smith’s famous principle, the general basic interest of corporate
interest groups is to widen their markets as much as possible, while con-
versely restricting potential new competitors. To this aim, individual firms
must cooperate with their existing competitors to the extent necessary for
defending or reshaping a regulatory playing field, allowing them to sur-
vive and possibly prosper. In different forms and degrees, business associa-
tions perform this function by providing incentives and bringing results to
30 G. MONTALBANO

confirm their membership, while shaping their collective interest and iden-
tities. Bowman stressed that in mediating among conflictual individual
interests that can potentially damage the whole industry sector, business
actors “need to be educated as to the nature of their collective interest”
(Bowman 1998: 304–5). Rather than having an immediate class con-
sciousness translating into collective interests (Offe and Wiesenthal 1980),
even capitalist interests—like workers—need to develop them through
their organized groups in the actual confrontation with antagonistic inter-
ests and policy-makers.
In such a process, business associations must steer compromises and
shared goals capable of persuading their members and earn their (either
tacit or proactive) support to at least fundamental and long-term interests.
In this sense, structural factors set the essential premises of collective
action, shaping interest groups’ mediation capability. For corporate actors,
the extent of the shared competitive pressures and concerns shapes the
relative capacity of different business associations to carve out a common
interest. According to Olson’s classical principle, the narrower the associa-
tion, the easier the mediation among their preferences and its capacity of
collective action (Olson 2009). However, a trade-off must be drawn
between the capacity to respond to individual interests and the represen-
tativeness of the organizations vis-à-vis the policy-makers at the domestic
and EU levels (Traxler and Schmitter 1995). Here the condition for effec-
tiveness is inverted: the more an association is capable of delivering uni-
tary and coherent demands on behalf of domestic- and
European-encompassing interests for a given policy issue, the more it will
respond to the domestic or EU policy-makers’ need for inputs from their
respective constituencies. As the supranational executive body, the
Commission can be expected to ask for demands from the EU-wide inter-
ests. Conversely, the governments in the Council would reflect the media-
tions of nation-wide interests. Lastly, as a supranational institution
composed of nationally elected members, the European Parliament (EP)
combined the domestic and EU-wide dimensions (Bouwen 2002, 2004;
Eising 2007a, b). However, conversely, the broader the representative-
ness, the more difficult for a business association to mediate among
diverging interests. Nevertheless, European and national associations are
expected to deliver inputs to the respective public authorities and policy
results. Under time constraints and pressured by the need to adopt and
defend a shared position, the interest formation within associations with a
broad geographical and inter-sectoral scope can thus be expected to be
Another random document with
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 Another source of pleasure are the markets of Paris. The great
Halles Centrales one generally visits once, and no more, as a truly
wonderful sight; but the flower-markets of the quays, of the
Madeleine, and St. Sulpice are scenes of perpetual delight. There
are many markets in the different quarters of Paris, where your
servant may go in search of vegetables, fruit, eggs, and fowls for the
national pot-au-feu. It is a small luxury, however, which I do not
recommend, though widely practised by the bourgeois, who has a
positive genius for the slow and ingenious saving of sous.
It is for all these reasons, and thousands more that creep into the
blood and the brain beyond the range of analysis, that Paris takes
such a grip of the foreigner, and becomes the birth-town of his
maturity. In other towns you sojourn as a stranger or a contemplator.
You live apart, either in your own world of dreams, among old
stones, ruins, and faded pictures, amid the dim aisles of Gothic
poems, or else you form part of a foreign coterie, and give and go to
afternoon teas, living like invaders, in insolent indifference to the
natives around you, except in your appreciation of them should they
be courteous enough to lend themselves to your notion of the
picturesque, or treat you with the consideration and kindness you
naturally deem yourself entitled to expect along the highways of
Europe. But Paris will have none of this patronage. If you settle there
it is inevitable that you will become Parisianised. I do not say
anything so flattering as that your taste in dress, if you happen to be
a woman, will, of necessity, become that of your adopted sister, but
there will be a chance that her eye for colour will modify your
barbaric indifference to it, and the cut of her gown and shape of her
hat will insensibly beguile you into altering yours. Nor, in the case of
the young gentlemen of Great Britain, would I imply that long
residence in Paris will affect their excellent tailoring, or turn them into
the overdressed popinjays of the boulevards. The Englishman and
the Parisian woman will always remain the best-dressed of their kind
wherever they may live; and, while the Frenchman, in morals and
manners, can descend to odious depths unsuspected by the blunt
and open-minded Saxon, he can also, when the race shows him at
his best, reveal virtues of subtler and more captivating quality. I know
no form of young man more charming than a good young
Frenchman, and can never understand why he figures so little in
French fiction. There is nothing of the prig about him. He does not
spend his days in being shocked at his neighbour; he is under no
compulsion to be narrow and dull; he does not quote the Bible, nor
does he desire, like the British virtuous youth, to mould all humanity
upon his own stiff and starched effigy. His wisdom is woven with a
great deal of gaiety; and when he happens to be dull, he carries off
his dulness with an imperturbable amiability. This type of Frenchman
a woman will never find offensive. He can oblige her with simplicity,
and courtesy and gentleness are the most distinctive features of his
character.
Foreigners in Paris seem to be very much swayed in their
judgments and adoption of French politics by the mental and moral
atmosphere they breathe, as well as by their own natural tendencies.
The average Briton far too rarely stoops to consider the question of
Republicanism, but condemns it beforehand on aristocratic
principles. Mr. Bodley, who wrote a singularly pretentious work on
France, frequented Bonapartist circles, and sat at the feet of the
Comte de Mun, and sundry other political noblemen of the same
mind; and the consequence is two tomes to prove that what France
wants is another Napoleon—the very thing that nearly ruined her.
The daughter of a sister Republic carries her millions into France by
marriage with some needy nobleman, who has already figured in no
estimable light in the pages of contemporary history written by
fashionable romancers, under the guise of fiction, and she perhaps
brandishes her parasol at the head of a band of miscreants, called
La Jeunesse Royaliste, in enthusiastic admiration of its mission to
batter the hat of a guest, an old man, the Head of the State, the
Representative of France before the world. Mr. Bodley’s ideal
appears to be not the good of France, but the triumph of the ideal of
the archbishops and owners of castles. The Republic is bad form,
and he would fain see it overthrown for the pleasure of his good
friend, the Comte de Mun. What the Parisianised, ennobled
American subject wants is to see her admirable and chivalrous
husband Court Chamberlain, or something of the sort;—she, too,
yearns for the life which every other countess in Paris wants, a Court
to confer a forgotten dignity upon herself, and if she longs for the re-
establishment of the old privilege, it is in order to patronise and
protect those she fondly deems her inferiors. Other rich or needy
foreigners in Paris wish for a Court to shine at, a monarchy or an
empire, to be able to boast of their powerful relations. And what none
of them will see is that France, in her several experimental moods, is
seriously labouring to discover the form of government best suited to
her needs, and that the elect of the people still hope, through trial
and blunder, to reach the ideal of a progressive liberality. But the
passion, the earnestness, of all these Parisianised foreigners in their
adoption of the several prejudices and aspirations of Paris prove the
truth of my assertion, that Paris absorbs us in her furnace of ardent
sentiments and theories as no other place does. We can not stand
by and view the spectacle of her follies and furies like a philosopher.
Needs must we go down into the fray, which in reality does not
concern us, and brandish the stick or parasol of revolt, whatever our
nationality. Needs must we adopt a party in the land which regards
us mistrustfully as foreigners, and rewards our generous enthusiasm
for its multiple causes by calling us “Sans-patrie,” “Jews,” and
“Traitors from Frankfort,” subsidised by a mythical syndicate, like the
Czar, the Emperor of Germany, the King of Italy, and the Pope of
Rome. Needs must we fret and fume, grow irritable and ill, perhaps
long to hear the tocsin ring for another St. Bartholomew’s, if we are
on one side,—that of the large, unenlightened, and foolish majority;
yearn to people the Devil’s hole with sundry scoundrels we have
come to hate if on the other side, that of the elect and liberal
minority, with a passion of hatred no public men in our own country
have ever inspired. What is the meaning of it? Is there some subtle
magnetism in the air of Paris which makes us see French rascals as
so different from other rascals, French tragedy as more poignant and
intense than any other? I know I could cheerfully get through the
remainder of my days in Spain or Italy without giving a thought to
either government or caring a straw whether Sagasta or Crispi were
in or out of office. I never see much difference between the
gentlemen who in turn manage the affairs of England; in fact, I never
have the ghost of an idea who is at the head of each department,
and could not for the life of me distinguish between Mr. Codlin and
Mr. Short. Not so in this brilliant, variable, light-headed, light-hearted,
graceless, and bewitching Paris. I am burningly anxious to know all
there is to be known about each minister of war, and take their
repeated defections almost as a personal grievance. I eagerly
examine the interpellations and their consequences, count majorities
and minorities in the turbulent Chamber, follow the fortunes of the
Senate, applaud, disapprove of all that happens with the ferocity of a
citizen who pays to keep the machine going. I know well that I am a
fool for my pains, and that I would be far better employed in minding
my own business. But it is all the fault of Paris for being so
abominably, so mischievously interesting. She it is who will not let
you let her alone. She is like a vain woman; she must have all
attention concentrated upon herself. She clamours for your notice,
and despises you for giving it. If you stand aside with folded arms
and look elsewhere, she will get into a passion, create a frightful
scene to attract your attention, and when you obey her and give it in
unstinted fashion, she turns on you and sneers and rails at you for a
foreign spy and busybody. Poor Mr. Bodley, all ignorant of the fretful
indignation he often roused in France by his thirst for information,
was for long regarded by many an honest Frenchman as a spy.
Oddly enough, I hold that the pleasure side of Paris, its
fashionable world, is the least of all to be envied. If I were a
millionaire, I think I should prefer London, with its larger public life, its
more varied hospitalities, for the investing of my millions in the thing
called experience. Even a British ass, with time on his hands, and
millions to squander, can discover an original method of going to the
dogs and casting his millions into the bottomless pit. But what can
the French idiot do after he has sent his shirts to London to be
washed, and invested in an automobile? He is such a superlative
dandy and humbug—I would fain use a hideous word, which
describes him still better in three letters, if it were not for its
inexcusable offensiveness—that he cannot bring sincerity to bear
upon his imaginary passion for sport, and looks ten times more
absurd when he is playing the athlete than when he is contentedly
playing the fool. He is “the sedulous ape,” not to literature, like
Stevenson in his young days, but to the Anglo-Saxon; and the folly
lasts on to the brink of age.
 The Faubourg holds itself more aloof than ever. It is now not even
on saluting terms with the Republic. Still its life must be lived after a
fashion, and it must give balls, if for no other reason than the
ignoring of ministers and their wives. It cannot be said that the
country at large is much affected by its doings; and if we are to judge
the inhabitants by the fiction of the day,—the dialogue novels of Gyp,
of Lavedan, of Abel Hermant, the psychological studies of MM.
Bourget, Hervieu, Prévost,—the sane and intelligent person may
thank his stars that he is still free to choose his society, and is not
condemned by an accident of birth to tread such a mill of vaporous
frivolity and futility, of intellectual blankness and arrogance, and of
senseless corruption. I do not presume to say that these clever
writers are invariably accurate in their delineation of fashionable
Paris, nor do I deny that there may be a good deal of exaggeration in
their sombre and revolting pictures,—for what lies under the
sparkling effervescence of the brightest and wittiest of Gyp’s earlier
work if it is not a dead-level of inanity and perversity? But their
singularity consists in the fact that all are unanimous in their
conclusions, in the general tenor of the life they portray. Pride of birth
is the only sort of pride this class seems to possess, and for a nod
the heroines of all those heraldic pages fall into the arms of the first
comer and the last alike. When you make the acquaintance of a
viscount, you may be sure he has an entresol somewhere for varied
clandestine loves, and passes his time between encounters here, le
boxe, and his “circle.” One solid, useful action never seems to be
entered to his account. His days and nights are devoted to
accomplished idleness and seduction, and his busiest hours are
those spent on his toilet. And the women of this dreary and
monotonous fiction,—how shall we qualify them? They have all the
frailty of the wicked, red-heeled, minuetting eighteenth century
without any of its charm, its wit, and real intellect. For if the marquise
of the old school, passed into perfumed memory, were a rake, she
was not a fool, she was not a rowdy, and she had a feeling for great
deeds and great thoughts. She stands on a picturesque eminence in
the history of her land. We cannot say the same for the titled rake of
to-day. It is the fashion to treat her as a détraquée, because she
subsists mainly upon excitement. But what needs altering is her
standard; what should be overthrown is the altar upon which she
sacrifices her futile existence. Not that she is the only example of her
class, but somehow the novelists have not thought fit to present us
with any other. The strange thing about it is, that she and her mate in
the game of battledore and shuttlecock with reputation and morality,
the incorrigible viscount, have been brought up under a supervision
and care exceeding northern conception. Neither was permitted a
moment of licensed childhood. Priest and nun were at the side of
each, in constant attendance upon their minds and manners and
morals. The male cherub lost his wings when the abbé made his last
bow and retired, leaving his charge alone on the brink of temptation,
a youth with a budding moustache. The maid ceased to be an angel
before the honeymoon had well begun; and, if we are to believe
polite fiction, was already one of the pursued of snaring sinners
before she was a week a bride.
The Paris of this class is not the Paris that charms and holds you
in its spell. The fast, luxurious, and expensive Paris belongs to it; the
cosmopolitan Paris, kept going by the millions of the foreigners who
come here to amuse themselves. Theirs is the Rue de la Paix, the
Concours Hyppique, the Arménonville Restaurant, the Bois, the
avenues of the Champs Elysées and the Parc Monceau, the race-
courses, the Théâtre Français “Tuesdays,” the charity bazaars, the
flower feasts and exhibitions, the automobile competitions, the “five-
o’clocks,” and M. Brunetière’s lectures on Bossuet. This is the rowdy,
reactionary Paris, ever on view, which disapproves of the Pope, and
would assuredly array itself in garments of gaiety if M. Loubet were
assassinated. This is the Paris which sneers at rasta-quouères, and
is ever on the lookout for American heiresses for its needy titled
sons, which is rabidly anti-Semitic, and supports its prestige upon
Jewish millions. Quite recently, when anti-Semitism was raging in
France, and we were informed in every tone of fury and contempt
that no self-respecting Catholic could possibly regard a Jew as an
honest man or a French subject, an authentic French marquis
married the daughter of a Hebrew millionaire, and to console
themselves for the obligation of profiting by their noble comrade’s
good fortune, his friends summed up the young lady’s qualities in
three amusing lines:—
 “Belle comme Vénus,
Riche comme Crœsus,
Innocente comme Dreyfus.”

The raillery did not prevent “tout Paris” from being present at the
splendid marriage ceremony, and inscribing its best names upon the
wedding gifts. It could not do less, seeing that its king and master,
Philip of Orleans, the digne (for alas! there is no English equivalent
of that indescribable French word as applied to a man)
representative of the House of France, is said to have accepted a
million from the bride’s anti-Semitic Hebrew mother.
There is another side, less known, of aristocratic Paris. This is the
quiet, exclusive, genuinely religious side, that of old-fashioned, rigid
noblewomen, who live apart in their dull, old houses of the Faubourg,
given up to prayer and good works. There is a charming distinction
about them, a musty, conventual odour, as you enter the halls of
their faded hotels. They preside over ouvroirs, where ladies of their
like meet to make church articles and decorate altar pieces.
Sometimes they carry piety and good-will to the poor to excess, for I
know of one, a baroness, who neglected her children to make
perfume and soap of her own invention, which she sold for the
benefit of the poor. The instinct of trade so developed that she ended
by opening a shop, on which she duly bestowed a saint’s name; and
here, if you are willing to pay exorbitant prices, you may find
wherewithal to wash and scent yourself with the labours of
aristocratic hands, and tell yourself you are doing so for the good of
mankind. Not that I would laugh at those ladies, who are the salt, the
redemption of their class. I once lodged in the dismantled hotel of
such a countess, and was edified by the stately, chill dignity of her
austere existence. Her private rooms were furnished with a touching
simplicity. Even in winter there was not a carpet anywhere, no sign of
luxury or comfort; but in her private chapel, where Mass was
celebrated every day, the vestments and ornaments were both
beautiful and precious. She herself had nothing whatever to do with
the frisky countesses of French fiction. She was in every sense of
the word a great lady,—handsome, with aquiline features, and with
hair worn high off a noble forehead, reserved, possibly too haughty
in bearing and expression for her reputation of piety, but essentially
one of the elect of this earth, the kind of woman that an aristocrat
should be, and too rarely is, to justify her privileges and pretensions.
Here, far off from the roar of reaction and the rumble of revolt,
such women dwell amidst the dim splendours of an impoverished
house, unfamiliar to the frequenters of routs and races; whose
names never appear in the society columns of the Figaro; who are
chiefly known to the poor and the priests of their neighbourhood; and
they it is who preserve some charm for the Faubourg, who help us to
regard it with some indulgence and sympathy in its futile discontent.
For what can be the benefit to itself or to France of this fine attitude
of disdain? Every part of a nation should go with the times, and the
Faubourg would have served its own cause as well as its country’s in
abandoning its belated ambitions, and making the best of its existing
circumstances. It feeds its pride on its absurd exclusiveness; and
who is the better for this? It is largely due to this insane vanity, that
Paris has become the centre of rowdy cosmopolitanism, the
pleasure-ground of the entire world, for it is the titled malcontents
who attract the class they are pleased, with signal ingratitude, to call,
contemptuously, rastas, instead of looking after the affairs of their
country. Since they will not earn their right to live, they must be
amused, and amusement is the costliest thing in the world. Not
having enough money for this profession, they needs must set
themselves out for the capture of alien millions; and then when the
foreign millions fall into their laps, by way of Frankfort, or New York,
or South America, they mourn and lament because the foreigners
take root, Parisianised by the sorceress Paris, and cry out that
France no longer belongs to the French, and that Paris is sold to a
band of cosmopolitan miscreants.
 CHAPTER III
SOCIAL DIVERSIONS AND DISTINCTIONS

With a race that has so thoroughly mastered the art of living, and
not merely working or vegetating, the question of diversion is of
paramount interest. In the fashionable world, sport monopolises the
better part of man’s hours. This is an overseas passion, adopted with
frenzy and fervour. M. Rémy de Saint Maurice has given us the
odyssey of the record cyclist in an amusing and humorous book, Le
Recordman, where we see the wealthy idlers of France in awed
adoration before the prowess of the racing-wheel. The champion
cyclist raises storms of emotion wherever he runs, be it in Paris or in
the provinces. When he returns to his native town, all the authorities
come to meet him and do him honour.
The French race is essentially a conversational and not a sporting
one. It has a natural predilection for the amenities of life, and we feel
how inappropriate is this present craze for rude and unsocial games.
You need only watch a Frenchman on horseback, and contrast him
with a British horseman to assure yourself of the fact that the point of
view of each is quite different. The Anglo-Saxon rides ahead with the
air of thinking only of his horse. The Frenchman trains his beast, like
himself, to have an eye to the arts and graces, to curvet and prance
minuettingly, to arch its neck as he himself bows, and he brings a
suggestion of the salon among the shadows of the Bois de
Boulogne. Should there be a mortuary chapel on their road to this
sophisticated paradise, stand and note the pretty way these dashing
creatures will salute death. Spaniards would do it, I admit, much
more gracefully, for in the art of salutation the Spaniard comes first
beyond a doubt. But you will not see anywhere in the British Isles so
pleasing a spectacle. Some bend altogether over their steeds, hat
curved outward on a wide sweep; others pause midway, less
ostentatious and theatrical in their respect, and hold their hats in a
direct line from their eyebrows, admirably suggestive of diplomatic
reticence, younger and elder men all expressing every shade of
effective recognition of alien grief with a subtlety, a dramatic felicity of
movement and line the stiff Anglo-Saxon could never hope to
achieve. Of course the supercilious Englishman would say he had no
mind to play the monkey, and find a cause for just pride in the rigidity
of his body, and the stoniness of his well-trained and inexpressive
visage. But here I differ from him. A man loses nothing by outward
grace, and there is no reason on earth why he should rejoice in the
fact that he cannot bow.
The motor craze has superseded the cycle craze. The bourgeois
bicycles so much that the youth of fashion needs something to
distinguish him on the road from his inferior brother. So somebody
came to his rescue with the motor-car. Go to Paris if you would
realise what a perilous thing the crossing of a street may be. In such
a neighbourhood as the Place Pereire it is almost mortal. I imagine it
as a machine invented by the upper classes to replace the guillotine,
and run down the miserable foot-passengers to avenge the
beheadings of a century ago. Whenever I return home, and discover
that I have lost a purse, a book, a packet according to my invariable
habit, I am so thankful to feel that I am still alive, in spite of the
automobile which charges through the streets in such a dreadful
way, that I balance loss and gain, and count myself still a winner in
the game of life by every new day to my account. In London you are
everywhere enveloped in a sense of public protection. The cab
drivers know how to drive, a feature of their trade they are most
imperfectly aware of in Paris. The policeman is there when he is
wanted, and, thanks to him, the nervous passer-by is valiant and
unafraid. But in Paris the driver regards him with an eloquent
hostility. His one hope is to get a free chance of running over him. He
is insolent, overbearing, and menacing, unfettered by policeman or
law in his man-crushing career. And, as if regretting the very slight
limits still left him, Paris cast forth upon the public way the motor-car.
This machine of destruction hisses along, leaving a trail of petroleum
in the air, and you have barely time to start back for its passage,
such is the fury of the horror in the hands of its fashionable owner.
There are many motor-cars in use for the big shops and public
offices; but these, being in no sense competitive in luxury, measure
the ground by a speed less fatal, the drivers seem to desire to leave
you whole, and suggest by their pace and bearing, some glimmering
of humanity in their heart. For it is only the rich young men who give
one the notion of wishing to avenge the massacres of the French
Revolution. For the benefit of these flowers of the race, exhibitions of
motor-cars take place, under the patronage of dukes and counts
more or less authentic. And, so encouraged, these wild Parisians set
out in their automobiles for the harmless and distant provinces, and
charge down the long French country roads with purpose often more
deadly than that displayed in the capital. The newspapers acquaint
us with frequent accidents; and whatever the general sentiment
regarding these accidents may be, I always feel that they are a well-
merited chastisement. Why must the poor, the obscure, the
inoffensive clerk and shop-girl, go in fear and trembling of their lives,
that the privileged few may add a fresh sensation to their list of
entailed emotions? Is not the luxury of a horse good enough for
those busy idlers, without adding heart disease to our inherited
disorders?
Boxing and fencing are also favourite exercises, as well as polo
and tennis amongst games. One of the more serious of diversions is
the duel, the first of which must be fought in early youth, and the last
when temperament and politics shall have said their final word. Then
come the amusements of club life, which absorb a good deal of
masculine leisure, of course, and where men meet to talk and be
entertained, as well as to eat, and read the newspapers. The races
and the horse-show are sources of pleasure at which every self-
respecting Parisian drinks. Not to be connected with horses or
exhibitions would be almost as bad as not to possess an automobile,
not to be seen in the foyer on great theatrical nights, not to have
fought a duel. But beyond even all these pleasures are the noisy
suppers of the fashionable restaurant, where everybody who is
anybody meets “tout Paris”; where the dresses of the women find
rivalry in the decorations of the men, and the scene approaches the
ideal paradise, the mundane city peopled with brilliant personages.
 In all things the French bourgeoise is more difficult to divert than
her aristocratic sister. She is much more particular and infinitely
more restricted in her ideas upon feminine liberty. While the women
of the upper class arrogate to themselves the right to amuse
themselves in whatever fashion they like, with lovers or without
them, bicycling, skating, shooting, on horseback, in automobile (the
Duchesse d’Uzès was the first Frenchwoman to obtain a certificate
as woman driver of the motor-car), private theatricals, they can
smoke or scale the mountains of the moon with impunity. All these
varied avenues of distraction are rigorously denied the bourgeoise.
She is the most conventional of creatures, and anything like marked
originality in one of her sex terrifies her and fills her with distrust. She
was bred in the conviction that girls should resemble their great-
grandmothers, be clothed until marriage in the integrity of imbecility,
and after marriage in the narrowness of piety, and know no other
amusements than those strictly suitable to a “feminine” woman. The
path her mother and grandmother trod is the path she must never
deviate from. She must be just as religious as they were, taking care,
however, to follow the fashions of her own class, in order to guard
from so dangerous and disreputable a pitfall as originality, which,
with her, means pronounced eccentricity. When she lives in Paris
she dresses well; but the province often transforms her into an
inconceivable shape of dowdiness. In Paris, thanks to the lectures,
music, drama, literature, the multiple elements of culture, it is
impossible for her to escape, unless her days be entirely devoted to
domestic economy and good works; she is rarely destitute of that
agreeable worldliness that makes commerce with her, however
shallow and superficial she may be, facile and often instructive. And
when she has the hardihood to plunge into deeper waters and think
for herself, when she ceases to be beset with a craving for the
ordered in conventional circles, and to think ill of originality and
individual character; there is no woman on earth more charming,
more capable, of readier wit, of less intellectual prudery, wedded to a
wholesome independence of judgment and principle.
But as I have said, the amusements of the bourgeoise, “big” or
“little,” are very restricted: books, theatres, balls, dinner-parties, with
the excitement of religious ceremonies, an academy reception, a
noisy sitting of Parliament, the hourly expectation of revolution, a
correct evening party,—the dullest thing on earth wherever it takes
place. But, on the other hand, we may be sure she will find ample
entertainment in looking after her admirably managed establishment,
in making her own and her husband’s means go a very long way in
accomplishing a thousand little domestic meannesses unknown to
the thriftless Anglo-Saxon, and all with a certain geniality and
discretion that win her the esteem and goodwill of her fellows. For of
womankind she is the most genial and well-mannered, and though
she may, in straitened circumstances, deny every pleasing luxury to
her family, her good humour will keep those around her in good
humour, and the counting of lumps of sugar and of grains of coffee
will seem a slight matter compared with the flavour of domestic
courtesy that accompanies the process. I have known of an English
family where at table forced strawberries and peaches were daily
eaten, and vegetables at a fabulous price, upon the finest damask
and priceless china, to the accompaniment of glasses flung by
sisters and brothers at an argumentative head, plates flying, and
oaths showered like missiles. Who would not prefer the economical
French middle-class table, where, in well-to-do families, lunch is
often served on shining oilcloth or table as polished as a mirror, to
save washing, and where the amenities are as carefully guarded as
if the household were on view?
In this world the young men, as elsewhere, have the best of it.
Theirs the licence of manhood in all things. The moment dinner is
over they put on their evening suit and file off (filer, as they say
themselves, in their pleasant French slang) in the quest of pleasure.
If they are well-to-do they have no difficulty in getting accepted in the
world of third-rate titles. Tarnished dukes will cordially shake their
hands. As there is no peerage in France to control aristocratic
pretensions, they may have as much as reasonable man can desire
of the society of marquises and counts, provided they take these
exalted personages on trust, and do not seek to examine too closely
their blazons. The method of making one’s self a count or a baron in
Paris under the Third Republic is very simple. You may purchase a
Papal title at a not exorbitant cost. In Abel Hermant’s Le Faubourg, a
porcelain manufacturer was awarded the title of count by the Pope in
return for a dinner-service he sent him, which was explained on the
grant as pour service exceptionelle. In France and America only are
Papal titles taken with gravity, and pronounced with all the sounding
magnificence of hereditary names. But a simpler way still, and less
costly even than the interference of Rome, is to buy a plate, and
have graven on it first a name prefixed by the particle de. When this
has been accepted without demur, and the newspapers have a
dozen times announced you here, there, and everywhere as M. de
⸺, then boldly apply the title of your predilection, and behold you
are, without more ado, a noble of France. No need of papers or
permissions. You are noble by the grace of your own goodwill; and
as most of the people around you are playing the same game, there
is no earthly reason why your friend should be more of a count than
you are of a baron. And so you may aspire to a larger dot from your
bride. If you are in the army, you may even look as high as your
general’s daughter; and when you travel abroad or journey in the
provinces, you will be made to understand what a fine thing it is to be
able, thanks to your own valour and judgment, to inscribe yourself in
hotel books as M. le Baron or M. le Comte. You will be served better
than when you were plain Mr. So-and-So. Waiters will help you off
and on with your coat with a deference hitherto not enjoyed by you in
your anterior plebeian state, and the society papers will record your
great doings with gusto and fervour. Who, under these
circumstances, would not be a count or a marquis? Had I known
years ago of the facilities and advantages offered in France to titled
adventurers, I might have had the wit and wisdom to style myself
countess of this or baroness of that, the sole existing representative
of an Irish King or a Norman house. Indeed, such is the
predisposition of the French bourgeois to believe in the noble origin
of his acquaintance, that one stoutly maintained before me that O
and Mac were the Irish equivalents of count; and my remark that
every second washerwoman or policeman in Ireland rejoiced in
those attributes of nobility was received with frosty incredulity. A
French officer’s wife of the name of Mahon assured me that her
husband was of noble origin, and related to Marshal MacMahon; but
that, unfortunately, the papers identifying the relationship were lost,
and, in consequence, they could not call themselves MacMahon. As
the good lady really believed every word she was saying, I could not
in courtesy point out to her that Mahon and MacMahon are equally
common names in Ireland, and, for that matter, in the British Isles,
and that every MacMahon deems himself a connexion of the late
marshal, though not one would have thought of claiming the
relationship if Marshal MacMahon had remained in obscurity.
A substantial source of income is occasionally derived by the
authentic nobles for the presentation of the other kind into the halls
of social greatness, and for standing sponsors for them in exclusive
clubs. Another source of income for avid noblemen lies in their
shooting and hunting grounds. So much is paid for an invitation, still
more for the button, which permits parvenus to hunt on equal terms
with their so-called betters. The extraordinary things these nobles
will do passes the imagination. I know of a viscountess who
possesses magnificent hunting land on which men from all parts are
invited to hunt. The guests departing naturally tip gamekeepers and
servants according to their means. Every tip, by order, under penalty
of expulsion from the château, must be brought intact to the
viscountess, and out of these tips are the servants paid their wages.
The life of fashion in Paris is pretty much the same as the life of
fashion elsewhere. Men and women ride in the Bois in the early
hours, and it must be admitted that they could not find a pleasanter
spot to ride in anywhere. The landscape is charming, and if you
break away from the Allée des Acacias—the Parisian Row—you
may even make a feint at losing yourself under columns of tall trees,
by little, moss-grown paths, where the branches meet overhead, with
ever in view grassy rolls of sward and bright trellises of foliage above
the broad white roads. In the early hours this trim paradise is cool
and quiet; and even an Anarchist on foot will have no cause to envy
his prosperous enemy on horseback, for the same delights of herb
and leaf, of sky and water, are his at a cheaper rate. Indeed, there is
no land on earth where a good-humoured taste of vicarious
pleasures may be so freely and fully enjoyed as in France. Amiable
petits gens sit on chairs and watch the great parade of the Bois
without a trace of envy in their looks, comment on dresses, horses,
equipages, bearing, as if it were but a pageant got up for their
benefit. I am not sure that this is not one of the advantages of
Society—one of its objects—to minister to the kindly and generous
vanity of the workers of a country. These, by their labours, maintain
it, dress it, wash for it, build for it, manufacture for it, keep in order for
it the public roads, give the best of their blood, brains, nerve, and
force to its triumphs, and are content to see how well the result of all
this gigantic travail of a race looks in the show hours of national
existence. The big dressmakers are repaid when, sitting in their loge
of inspection, they watch the effect of their several creations on
Varnishing Day, at Auteuil or Longchamps. The artistic temperament
is at the root of all this contentedness, of these subtle gratifications
which the Philistine workman does not apprehend. The Frenchman
brings this sentiment of art into all he does. The word “artist” is
applied to cook, dressmaker, milliner, hair-dresser. In many ways M.
Demolins has shown us that the race is inferior to the Anglo-Saxon
races, but it has one essential superiority—the absence of vulgarity
in the artisan and shopkeeping classes. You can hold converse with
pleasure and profit with your washerwoman, who also will, in all
probability, be something of an artist, with the artist’s personal point
of view; with your char-woman, your hair-dresser; and the grocer’s
boy on his daily rounds, if you come in contact with him, you will find
to be an intelligent and well-mannered youth. It is only when you get
a little above this class that you light upon a trace of commercial
vulgarity. The commis voyageur is something of a trial on the public
road. He is not a pattern of manners, and he is apt to be aggressive
in his desire to obtain the value of his money. Go still higher, among
the wealthy bourgeois, and in no land of all the world will you find
men who can comport themselves worse. In their attitude to women
they seem to possess no standard of courtesy whatever. When a
Frenchman of this class is polite to a woman, you may be in no
doubt of his views in her regard, and you may be perfectly sure of
her social and pecuniary value; for he is the least chivalrous, the
least kind, the least disinterested of mortals, speaking generally,
though here, as elsewhere, you will find noble exceptions. I hardly
know an American or English woman who has travelled or stayed
any time in France who has not had occasion to note how much less
courteous to women Frenchmen are than their own men. Two young
English ladies, finding themselves in some dilemma with regard to
trains or luggage, had occasion to call on one of the chiefs of the
Gare du Nord. This gentleman, elegant, disdainful, and fatuously
rude, received them in a luxurious office, fitted up with such
splendour as to suggest some of the complications of the Parisian
drama, and bore himself towards them with such intolerable
insolence, that, on going out, one of the travellers, to be even with
him, said: “Everything may be found in Paris, I see, except a
gentleman!” This, of course, is angry exaggeration, for nobody can
be more delightful than a Frenchman, when he chooses to give
himself the trouble to please and to serve; but it is as good an
example as I can give of the attitude of the French functionary to the
public. Put a uniform of any sort on a Frenchman, invest him in any
kind of office, and he is apt to become insupportable. Rudeness he
practises as part of his official dignity. It never occurs to him that he
is there to assist the public. He conceives himself to be there to
insult and domineer over the public.
In France, social distinctions are less insusceptible of permutation
than elsewhere. Everything is possible in a land where a tanner may
hobnob with a Czar, be embraced and addressed by that august
personage as “friend.” The nations of Europe may object to this state
of things, but the nations of Europe must put up with it. Amongst
these same nations France cannot be left out of the reckoning. Her
capital is always felt to be the best morsel of foreign travel. It is she
who gives “tone,” for I do not speak of anything so obvious as the
unquestioned prestige of her fashions. A day may come when this
prestige shall have passed elsewhere, but even when that day
comes Paris will continue for long years to subsist upon her ancient
renown. Even now there are signs of revolt against her sovereignty.
For in my own town, Dublin, contempt for her fashions is openly
expressed, it being alleged here that the women of Dublin dress with
far greater taste than their sisters of Paris. Those who are inclined to
make light of these pretensions should go to Dublin in the Horse
Show week, where I am assured that the dresses of the girls and
women of Dublin leave Paris nowhere. So the good people of Dublin
say, for they have a fine conceit over there, and profess to hold
Europe in light esteem. But in spite of this it is not improbable that
Paris will continue to maintain its superiority.
Under republican rule, woman has no official position, is in all
matters of state a mere cipher. And so it is not possible for the
President’s wife to start a fashion, or for any Minister’s wife to guide
the vagaries of taste. This in itself suffices to explain to us the fact
that a large majority of women are anti-republican. They feel that
their sex is insulted by a Government which takes no recognition of
their charm and influence, presumes to govern without the
assistance of their presence, without any loophole for their
unauthorised supremacy. There is no chance for a Pompadour under
a Republic, and whatever other abuses may exist to-day, ladies of
light morals cannot hope to attain heraldic glory and hereditary
wealth by the “primrose path of dalliance” with royal Lotharios. And
so social distinctions are now in France more complex and less
stringent than under the ancien régime. Complexity lies in the variety
of claims not known in former days, when the division between the
classes was sharp and infrangible. In the world of toque and robe
there are men who count themselves the superiors of the crusaders;
in the army there are generals of plebeian origin who think
themselves the first of Frenchmen; there are fashionable doctors and
surgeons, painters, authors, politicians, men of science, and
merchant princes who regard themselves almost as the equals of the
crowned heads of Europe.
All these varied ranks of society meet at a general point—social
pretension. Wealth is the sole degree they really acknowledge,
though “good family” is their vaunted consideration. They are aware
that fashion and birth are no longer synonymous terms, that the goal
is quickest won by the longest purse. A duchess with a hundred a
year may feast on her own prestige in the eyes of a few intimates,
but the world at large will forget her existence to run after the
capitalist of yesterday’s standing. With the suppression of the power
of the aristocracy, its removal in a body from the governing centre,
the field was left free to money and talent; and with industry and
education both may now be said to be within reach of everybody.
The aristocracy groan, ineffectual and undignified, while a large