Why has EU macroeconomic governance become more supranational?

Abstract

While much of the literature on the Euro crisis has highlighted the intergovernmental features of the European Union response, it appears that in strategic areas, such as macroeconomic policy or banking regulation, supranational institutions have seen their discretionary powers significantly enhanced and that they have played an instrumental role in bringing about such a change. This is all the more remarkable considering the decline in support for integration among governments and the public. This article explains this paradox by the dramatic character of the crisis and the deep mistrust that existed between European states at the time. It also suggests that the process could be hard to reconcile with attempts at ‘politicizing’ EU public policy.

Keywords:

• Institutions
• supranationalism
• intergovernmentalism
• macroeconomic policy
• banking union

Notes

1. See Articles 4(2), 5(2) and 6(2) of Regulation 1173/2011 and Article 3(3) of Regulation 1174/2011 (Six Pack); see also Article 23(10) of Regulation 1303/2013.

2. Interview, Brussels, 9 April 2015.

3. Not least by the German government, the Commission and the ECB. See, e.g. the Ludwig Ehrard lecture delivered by the Commission for economic and monetary affairs Olli Rehn, Brussels, 26 October 2010, available at http://europa.eu/rapid/press-release_SPEECH-10-590_en.htm?locale=en

4. See, e.g. Article 3(3) of the Fiscal Compact.

5. Interview with Mario Buti, Director general, DG ECFIN, May 2015.

6. MAKING THE BEST USE OF THE FLEXIBILITY WITHIN THE EXISTING RULES OF THE STABILITY AND GROWTH PACT, COM(2015) 12 final of 13 January 2015.

7. European Commission, Recommendation for a Council recommendation with a view to bringing an end to the excessive government deficit in France, 27.02.2015, COM(2015) 115 final.

8. ‘At the Crossroad. The Euro-area between sovereignty and solidarity’, Speech delivered at Sciences Po, Paris, 12 November 2015, available at: http://www.bundesbank.de/Redaktion/EN/Reden/2015/2015_11_12_weidmann.html

9. Interview with Herman Van Rompuy, April 2015.

10. Le Monde, 17 October 2002 ?

11. See Article 293(1) of the Treaty on the Functioning of the European Union.

12. Agence France Presse, 29 September 2010.

13. See, e.g. Article 4(2) and (3) of Regulation No 1173/2011 of 16 November 2011 on the Effective enforcement of Budgetary Surveillance in the Euro Area.

14. Article 7.

15. Euro Area Summit Statement of 29 June 2012.

16. Interview with Pedro Teixeira, Secretary to ECB decision-making bodies, 2 March 2016.

17. Interview with official in the French Treasury, 3 March 2016.

18. Interview with European Commission Secretariat General official, May 2015.

19. Interview with official in the French Treasury, 3 March 2016.

20. Interview with official in the French Treasury, 3 March 2016.

21. Interview with former European Council President Herman van Rompuy, Brussels, 9 April 2015.

22. Interview with Herman Van Rompuy, April 2015.

23. Interview with Enrico Letta, Paris, 21 January 2016.

24. Interview with former Italian permanent representative Ferdinando Nelli Feroci, 19 February 2016; Interview with official in the French treasury, 3 March 2016.

25. For a large majority of Germans (60%), the Italians were the most corrupt and the Greeks the least hardworking among Europeans (PEW 2012).

26. Interview with official in the French Treasury, 3 March 2016.

27. Interview with Herman Van Rompuy, April 2015.