Supranational agency and indirect governance after the Euro crisis: ESM, ECB, EMEF and EFB

ABSTRACT

This article categorizes newly created and proposed Economic and Monetary Union (EMU) institutions according to a new typology that broadens the well-established agent-trustee distinction to include cooptation and orchestration as two additional modes of indirect governance. Four empirical cases from the realm of EMU governance are discussed, i.e. the European Stability Mechanism (ESM), the European Central Bank (ECB), the proposed European Minister of Economics and Finance (EMEF) and the European Fiscal Board (EFB). Empirically, it shows that supranational actors like the European Commission can bypass states through enlisting existing authority to deepen European integration.

KEYWORDS:

• European integration
• Supranationalism
• orchestration
• indirect governance
• Economic and Monetary Union

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. The idea had already surfaced during the onset of the eurozone crisis (Mayer 2009; Gros and Mayer 2010).

2. According to the ESM term sheet, ‘Member States need to meet quantitative benchmarks (i.e. the debt benchmark, the minimum benchmark and a deficit below 3% of GDP) and to comply with qualitative conditions related to EU surveillance (i.e. not experiencing Excessive Imbalances and not being subject to the Excessive Deficit Procedure)’ (Eurogroup 2018).

3. Vice versa, this relationship might not hold as the case of the ESM shows. If a governor has created an agent with the objective to minimize agency loss, the governor is likely to double down on control mechanisms rather than turning it into an independent trustee.