Under what conditions can the state discipline private equity firms into delivering the investment required to meet the coming needs of industrial transformation? States have sought to crowd in private capital to finance industrial development, but the results have so far been less than satisfactory. Prevailing accounts of financial industry power largely characterise an arms-length state-finance relationship that has unfolded in private-led markets where private equity firms have contributed to the secular growth in non-productive economic activity. This article problematises the assumption of private-led markets and argues that state-led markets present a counterfactual in which the disbursement of public money entails strict policy discipline and tight embedding between the state and private equity firms, which provides the conditions for them to emerge as unlikely champions of industrial policy. Two cases of co-investment between Chinese and European sovereign wealth funds demonstrate the power dynamics at play. Where PE firms in the Sino-Irish co-investment facilitated the international scaling of Irish firms in China, the PE firms operating in Europe failed to embed Chinese firms into regional supply chains in the Sino-Belgian co-investment.

The literature on fifteen years of European crises leaves the reader with a puzzle. Prominent accounts of the longest crisis - that of the euro area (EA) - assert that the EA is deeply divided between North and South, with Central Eastern European (CEE) member states being ignored. This makes it hard to explain how the union has managed to reform since 2008 and especially during the Covid-19 pandemic. Scholars have started to talk of transnational coalitions, but they equate coalition-formation with bringing together the like-minded, typically over solidarity versus sovereignty and more or less integration. However, coalitions of the like-minded are typically too small to sustain reforms and compromise has to be sought with others who have different preferences. To establish empirically how stable or fluid transnational coalitions are, we exploit the EMU|Choices database (Wasserfallen, Leuffen, Kudrna, and Degner 2019) [Analysing European Union decision-making during the Eurozone crisis with new data. , 20 (1), 3-23] on EA reforms and our own original data on Covid-19 reforms. Our findings show a stable pattern but no geopolitical divide - coalitions have varying CEE members. These findings can provide a basis for developing a more plausible conceptualisation of transnational coalitions.