Abstract
A new consensus has emerged which stipulates that the Eurozone problems are caused by a lack of embeddedness of the euro in proper financial and fiscal unions. This paper reviews the debates on the Eurozone’s state of disembeddedness and argues that it is not enough to embed the monetary union in scaled-up financial and fiscal unions. For the euro problems to disappear it needs to be embedded in social Europe. The transfer of policy prerogatives at the supranational level does not make the structure embedded, but the substance of the policy measures. From a Polanyian perspective, the extent of the Eurozone dis/embeddedness depends not on the level of centralization of policymaking, but on the interplay between the two forgotten Polanyian principles: improvement and habitation. This paper tries to assess the extent of dis-embeddedness through these two principles.