The determinants of euro zone development: governments and fragile legitimacy

ABSTRACT

Euro zone economic governance is determined by governments, as member states resist ultimate transfers of authority to traditional supranational institutions. Neither crisis-driven institutional change nor later reform initiatives have altered this predominant role of domestic executives. The Commission cannot exercise ultimate decision-making powers in the domain of economic governance unilaterally. Instead it is co-opted to what could be called a collective euro zone executive of member state governments. The latter act by consensus or not at all. The democratic pathologies of European politics imply that governments remain reluctant to vacate their seats in euro zone governance. So far, governments have consistently opted for making collective decisions and have chosen to circumvent domestic actors when the euro was at risk. However, governments shy away from forward-looking reforms, which have redistributive implications and are beyond their future control, as they remain uncertain of their own legitimacy when deciding on the euro’s future.

KEYWORDS:

• Euro crisis
• euro zone
• national parliaments
• legitimacy
• intergovernmentalism

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by H2020 Societal Challenges [grant number 649532].

Notes on contributors

Uwe Puetter

Uwe Puetter is Professor of Empirical Research on Europe at Europa-Universität Flensburg and visiting professor at the College of Europe in Bruges. His research focuses on new intergovernmentalism and institutional change in the European Union. Among his publications are 'The European Council and the Council – New intergovernmentalism and Institutional Change' (2014, OUP) and 'The New Intergovernmentalism – States, Supranational Actors, and European Politics in the Post-Maastricht Era' (2015, OUP).

Sonja Puntscher Riekmann

Sonja Puntscher Riekmann is Professor Emerita of Political Theory and European Politics and research fellow at the University of Salzburg, where she was Academic Director of the Salzburg Centre of European Union Studies and co-coordinated the Horizon 2020 project EMU Choices (2015–2019). Her research focuses on European integration and EMU, European democracy and constitutionalism. She is co-editor of the book ‘The Reform of Eurozone Politics’ (ECPR Press 2020).