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The (European) derisking state

Gabor, Daniela

Authors



Abstract

The emerging green capitalist state in the Global North is a derisking state. The derisking state enlists private capital into achieving public policy priorities by tinkering with risk/returns on private investments in sovereign bonds, currency, social infrastructure (schools, roads, hospitals and houses, care homes and prisons, water plants and natural parks) and most recently, green industries. The concern with the production of investibility forges a state-capital relationship where capital dominates. Yet the specific architecture of regulatory, fiscal and monetary derisking interventions varies across polities, is activated at different speeds and with different degrees of coordination, contingent on specific macro financial constraints and vulnerable to political strains. Both in the EU and the US, derisking has emerged as the method to organise green industrial upgrading in the Green Deal Industrial Plan and the US Inflation Reduction Act, successfully generating elite support for taboobreaking autonomous strategic visions, in contrast with the state-directed approach in the CHIPS Act that disciplines private capital into national security priorities for semiconductor manufacturing. Yet in the EU, «whatever it takes» derisking does not easily translate from monetary to fiscal policy, because it requires Member States to agree on relaxing the distinctly European macro financial constraints around the provision of state-aid. The institutional response to these constraints, the European Sovereignty Fund, reinforces the derisking imperative. Furthermore, the limited scope for disciplining (carbon) capital raises serious doubts about the overall suitability of derisking for governing decarbonisation.

Journal Article Type Article
Acceptance Date Jul 2, 2023
Online Publication Date Jul 12, 2023
Publication Date Jul 12, 2023
Deposit Date Aug 18, 2023
Journal Stato e Mercato
Print ISSN 0392-9701
Electronic ISSN 2612-0976
Publisher Società Editrice il Mulino
Peer Reviewed Peer Reviewed
Volume 1
Issue 127
Pages 53-84
DOI https://doi.org/10.1425/107674
Public URL https://uwe-repository.worktribe.com/output/11044798
Publisher URL https://www.rivisteweb.it/doi/10.1425/107674