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This book a study on the work of the Eurogroup—monthly informal meetings between euro area finance ministers, the Commission and the European Central Bank. It demonstrates how this small, secretive circle of senior decision-makers shapes European economic governance through a routinised informal policy dialogue. Although the role of the Eurogroup has been contested since before the group's creation, its actual operation has never been subject to systematic evaluation. This book opens the doors of the meeting room and shows how an understanding of the interplay of formal provisions and informal processes is pivotal to the analysis of euro area governance. The book advances the conceptual understanding of informal negotiations among senior European and national decision-makers, and provides an in-depth analysis of historical episodes of policy coordination. As other areas of European decision-making rely increasingly on informal, voluntary policy coordination amongst member states, the Eurogroup model can be seen as a template for other policy areas.
suddenly to fundamental economic policy ideas. Some agenda points might comprise broad orientation debates, while others demand an immediate decision on a common euro area position. This chapter gives an overview of the Eurogroup’s agenda. It outlines the main characteristics of each agenda item and points to crucial developments. This perspective is intended to demonstrate the role of informal policy deliberation with regard to different aspects of economic policy coordination in the euro area. When the Eurogroup gathered for its first meeting in June 1998 the
2833Intro 14/2/06 9:44 AM Page 1 Introduction The informal Eurogroup, comprising the finance ministers of the euro area, plays a central role in the economic governance set-up of Economic and Monetary Union (EMU). This might seem surprising given that the group is deprived of any formal decision-making competences and keeps a low official profile. The group is the smallest coordination forum known in Brussels. Only the ministers themselves attend the meetings and they find no administrative infrastructure at their disposal. In fact, the Eurogroup pre
represents a framework for routinised informal policy dialogue among the euro area’s key decisionmakers. In this context the deliberative style of the informal discussions plays a pivotal role. Policy deliberation fosters consensus among decisionmakers on appropriate policy options. Moreover, routinised informal policy dialogue within the Eurogroup is based on an underlying working consensus implying that actors share a common understanding on the fundamentals of the coordination process within the area of EMU – be it called a ‘culture of coordination’ (Fabius 2000) or a
2833Chap3 14/2/06 9:46 AM Page 63 3 The informal working method Against the background of the account on the institutional and historicalpolitical sources of informal governance this chapter introduces the features of the Eurogroup’s peculiar working method. It is within this institutional setting that the euro area’s top decision-makers address the challenges to economic governance in Stage 3. The actual work of the group is not regulated through legal provisions. Informal governance within the Eurogroup is built on a set of routinised practices and shared
2833Chap6 14/2/06 9:49 AM Page 140 6 Assessing the Eurogroup’s informal working method The Eurogroup constitutes a unique framework for discussions among euro area finance ministers, the Commission and the ECB. As the preceding empirical analysis has shown, the Eurogroup is firmly anchored within EMU’s economic governance framework. The following two chapters review the findings of the case studies in the light of the theoretical argument which was set out in Chapter 1. This chapter assesses the potential of the Eurogroup’s informal working method to foster
environment was more adverse than expected, euro-area policies were inconsistent, implementation by the Greek authorities was inadequate or insufficient, debt restructuring should have been front loaded, fiscal austerity has been excessive, and finally, not enough weight was given to the structural reform and competitiveness objectives.6 The report stressed that the impact of austerity was difficult to assess. Greece was already in recession when the programme was first implemented. However, ‘it was evidently hazardous to impose a 10 percent GDP shock to a leveraged and
governance can be as direct as in the case of coordinated position-taking by euro area ministers in the ECOFIN Council. In this case the Eurogroup pre-agrees pending Council decisions informally. Given that euro area member states command the vast majority of the votes in the ECOFIN Council, agreement there is only a formality. In a similar way the Eurogroup can coordinate decisions by national governments. The latter scenario of course implies that the respective finance ministers enjoy the political authority to enact the agreed measures at the domestic level. However
that the review of budgetary policy in the euro area ranks uppermost on the Eurogroup’s agenda. The involvement of the group in the drafting processes leading to the formulation of common policy guidelines and objectives furthermore has shown how individual discussions in the run-up to formal decisions by the Commission or the Council become embedded in the wider discussion process within the Eurogroup. The illustration of the interaction of informal dialogue and aspects of formal decision-making is at the centre of the following discussion. Most deci- 2833Chap5 14
2001; Somers 1998). Thus, one should expect policy-makers to approach particular economic situations in different ways. Continuing dialogue is important in order to take these different backgrounds into account and to review them collectively. Moreover, it is reasonable to assume that the discussion of different policy preferences among euro area finance ministers is facilitated by the fact that elite identity in this policy area is most pronounced compared to other fields of EU governance (Dyson and Featherstone 1999; Marcussen 2000; Ungerer 1997; Verdun 1999