While the political Europeanization of most of the Western Balkans remains uncertain, its financial dimension already structures both materially and socially the daily lives of almost every household in the region. European banks have become dominant in Bosnia and Herzegovina as in many other Southeastern European (SEE) countries at a time when economic transformations have caused citizens to struggle with credit and debt. Although this has assured households a wider access to credit, at the same time it has increased their vulnerability to the Eurozone’s financial instabilities and their exposure to speculative dynamics carried out by banks outside of the EU regulative framework.
It is thus in their everyday relations with banks that citizens in Southeastern Europe elaborate their considerations, aspirations and disillusionment about their integration within EU.
1. Europeanization and Euroization
Finance-led Europeanization in South-eastern Europe is not the private initiative of commercial banks. It developed within the local public monetary policy of euroization (Euroizacija), that is, within the open-ended transformation of the domestic economy that preceded these countries’ still-pending integration into the eurozone. The main feature of this process is the existence of local currencies pegged to the euro with a fixed exchange rate, such as in Bosnia or Bulgaria, or with a mildly fluctuating exchange rate, such as in Croatia and Serbia.
Euroization was meant to stabilize unstable domestic economies after the turbulent years of geopolitical transformation, warfare, and hyperinflation that undermined trust in local currencies and economies. This approach turned out to be very effective in attracting foreign goods and capital, and EU banks (mainly Austrian and Italian) capitalized in euros and lent preeminently in that currency. These dynamics meant the economies of many countries in the region bore the hallmarks of so called “peripheral financialization,” which in South-eastern Europe took on a specific European character.
If the effects of euroization on the macro-economic stability of these countries are a matter of debate among scholars, from a socio-anthropological point of view, euroization, especially its financial implications, has a significant impact on the social and material conditions of SEE citizens involved in a process of the “financialization of daily life”. Across the region, households are forced to finance through credit both welfare services (such as housing, decent health care, or education) previously supplied by the state and consumer goods that had before been economically affordable thanks to stable employment. In this situation of generalized socio-economic downward mobility, access to credit (and debt) has been very often provided by European banks tending to offer cheaper euros or euro indexed loans, with interest rates determined by the fluctuation of the EURIBOR (or of the exchange rate between local currencies and the Swiss franc).
In conjunctures such as the euro crisis, and in conditions of defaulting credit consumer protection, indebtedness to EU banks had tangible effects on households’ social reproduction. Credit restriction, the higher number of requested collaterals (properties or guarantors), increasing interest rates, and levels of indebtedness forced households into further impoverishment, the disintegration of their familiar and social networks, and, in the worst cases, to debtor or guarantor suicide. These painful experiences were widely perceived as the consequences of the unpredictable and uncontrollable dynamics evolving from the Eurozone and fostered the rise of a new self-perception of being a European periphery “at the bank counter.”
2. Financial Peripheralization
European currencies have long been formally or informally present in the economic systems of some Southeastern European countries. In Socialist Yugoslavia for example, the informal trading of the foreign currencies of European countries (together with dollars) was widespread, allowing consumers to access cross border consumption. Starting in the late 1970’s it had become commonplace to hold bank savings in foreign currencies due to the growing monetary instability of local currencies. This experience fostered a culturally elaborated idea of soft and hard currencies matched to a widespread acknowledgment of a monetarily “stable” Europe and an “instable” SEE. This idea still structures practices of holding foreign currency deposits, which in countries like Bosnia are mostly financed through remittances. The custom has not been challenged by the introduction of the euro, which has been considered the successor to the “stable” European currencies used in the past (mainly the Deutsch Mark). Despite the fact that the euro can be still considered a reserve of value in deposits, it has a significantly different function in the credit system. There, the narrative of “euro stability” enhanced by banks’ marketing strategies proved to be deceptive and dangerous for SEE credit consumers, as demonstrated by the rise of interest rates during the eurozone crisis, when it became increasingly evident that the euro had also become the currency of citizens’ debt and banks’ profits.
Besides the awareness of being in a position of dependence on the eurozone’s financial turbulence, the crisis made clear to bank customers outside the EU that they were excluded or at least marginalized from consumer rights within the eurozone. Although households in the EU space were also directly affected by strategies adopted by financial institutions to prevent potential losses, these were politically tackled in the eurozone with the effect of lowering EURIBOR and keeping down interest rates. Ethnographic evidence shows that this did not always apply to customers of EU bank branches in Bosnia or in neighboring SEE countries, where market deregulation resulting from anachronistic socialist legislation and the interplay between bank lobbies and local political forces left room for several strategies that expanded profit-making opportunities.
3.What if Europeanization becomes synonymous with Financialization?
From a Bosnian perspective, Europeanization is a two-speed process: the accelerated financial inclusion of the population and the slow political governance of the phenomenon. This created an ideal environment for a financialized system that is fostered by the weak commitment of political institutions in mediating between citizens and the market. Since local political authorities are considered the representative of private and often personal interests, many indebted Bosnians still look to the institutions of the EU as a guarantor of last resort to protect their consumer rights. At the same time, it is evident to them that European institutions have little control over risks that people take on the credit market in their daily lives. The Vienna initiative, launched in January 2009 at the height of the global economic crisis to prevent systemic risk from the eurozone to the Southeastern European banking system, has had a limited impact on the micro level.
Furthermore, euroization has transformed SEE countries into small open economies, involved in unilateral flow of goods and capital. This has fostered a process of finance-led Europeanization that in Southeastern European countries made it clear that European investments in the region were flowing principally into the credit system, thus into sectors profiting from interest rates and not from goods production and income generating activities. This conflicts with Bosnian citizens’ desire for inclusion in the EU as full citizens rather than simply as peripheral consumers of European financial products.
 Becker, J., J. Jäger, B. Leubolt and R. Weissenbacher (2010), Peripheral financialization and vulnerability to crisis: a regulationist perspective, Competition & Change, Vol. 14 No. 3–4, 225–47
 A review can be found in Radošević D., Cvijanović V. (eds.) 2015, Financialization and Financial crisis in South-Eastern European Countries, Frankfurt am Mein, Peter Lange
 Martin R. (2002), Financialization of daily life. Labor in crisis, Philadelphia, Temple University Press.
Title picture: Medley (own compilation, global-sees editors’ office) of two pictures: A) “european bosnia” by “Cradel” (Wikimedia Commons, Licence: CC-BY-SA 4.0), B) “Alle Eurobanknoten”, by Andrew Netzler (Wikimedia Commons, Licence: according to ECB).
Lofranco, Zaira Tiziana: “The Financial Dimension of Europeanization in Southeastern Europe: A Socio-Anthropological View from Bosnia and Herzegovina”; in: Globalising Southeastern Europe (19.03.2020); URL: https://global-sees.org/2020/03/19/the-financial-dimension-of-europeanization-in-southeastern-europe-a-socio-anthropological-view-from-bosnia-and-herzegovina/.