The Eurogroup, power and accountability

• DOI: http://doi.org/10.1111/eulj.12251
• Date: 01 July 2017
• Published date: 01 July 2017
• Author: Paul Craig

ORIGINAL MANUSCRIPT

The Eurogroup, power and accountability

Paul Craig*

Abstract

This article considers the role of the Eurogroup in EU decision‐making, a topic that is under‐theorised, more espe-

cially given its importance in the overall EU schema. The Eurogroup's power has grown very considerably, largely

because of the enhanced role that it has been accorded as a result of the financial crisis, with the result that its

power no longer accords with the Treaty provisions that specify its function. The article sets out theTreaty foun-

dations of the Eurogroup, examines its role in EU decision‐making, the rationale for its increased power, and the

extent to which it is politically and legally accountable.

1|INTRODUCTION

The Eurogroup can lay good claim to being the EU body that is least understood, which is surprising given the important

role that it plays in EU decision‐making. This article seeks to enhance understanding of this body.

1

The discussion begins

with elaboration of the Eurogroup's foundations within theTreaty. This is then followed by analysis of the ways in which

it exercises political power within the EU. It exercises very considerable power over policy and planning for states that

subscribe to the euro, and is also at the centre of implementation and execution of such policy. The focus then shifts to

political accountability, which includes discussion as to the rationale for the increase in the Eurogroup's power, the

nature of the Eurogroup within the lexicon of political institutions, and the extent to which it is politically accountable.

The remainder of the article is concerned with the Eurogroup's legal accountability, which came to the fore in recent

disputes before the EU courts. The courts' reasoning is set out, followed by a critique of the legal status quo.

2|FOUNDATIONS

The Eurogroup

2

took shape with the introduction of the single currency, towards the turn of the last millennium. The

first informal meeting of finance ministers of the euro area countries occurred on 4 June 1998 at the Château de

Senningen in Luxembourg. There is a proximate connection between the Eurogroup and the formal EU institutions.

Thus the Eurogroup can hold preliminary discussions on Council decisions that apply only to the euro area Member

States, and it is the Eurogroup that prepares the Euro Summit meetings and is responsible for their follow‐up.

*

Professor of English Law, St John's College, Oxford. An earlier version of this article was given at a conference in Uppsala, and I am

grateful for the comments that I received on that occasion.

1

See also, U. Puetter, How a Secretive Circle of Finance Ministers Share European Economic Governance (University of Manchester,

European Policy Research Unit, 2006); C. Callies, ‘The Governance Framework of the Eurozone and the Need for Treaty Reform’,in

F. Fabbrini, E. Hirsch Ballin, and H. Somersen (eds.), What Form of Government for the European Union and the Eurozone? (Hart Publish-

ing, 2015), ch. 3.

2

http://www.consilium.europa.eu/en/council‐eu/eurogroup/.

DOI: 10.1111/eulj.12251

234 © 2017 John Wiley & Sons Ltd. Eur Law J. 2017;23:234–249.wileyonlinelibrary.com/journal/eulj

The Eurogroup is recognised in Article 137 TFEU, which provides that ‘arrangements for meetings between min-

isters of those Member States whose currency is the euro are laid down by the Protocol on the Euro Group’.The pre-

amble to Protocol 14 is framed in terms of the need to promote stronger economic growth in the EU and to develop

closer coordination of economic policies within the euro area. It emphasises the need for special provisions for

enhanced dialogue between the euro area Member States, pending the euro becoming the currency of all EU Member

States. Article 1 provides that euro area Ministers shall meet informally when necessary ‘to discuss questions related

to the specific responsibilities they share with regard to the single currency’.It specifies that the Commission shall take

part in the meetings, and that the ECB should be invited. Article 2 provides for the election of a President of the

Eurogroup for two and a half years, by a majority of those Member States.

The Eurogroup is composed of ministers of the euro area Member States and is a forum for discussion of shared

responsibilities related to the euro. It normally meets each month, before the Economic and Financial Affairs Council

(Ecofin) meeting. Meetings may, however, be held more often, as during the financial crisis. The Commissioner for

Economic and Financial Affairs, Taxation and Customs, and the President of the ECB participate in the Eurogroup

meetings. The Managing Director of the European Stability Mechanism (ESM) is invited to participate in the meetings,

so too is the International Monetary Fund (IMF) in relation to discussion of programmes in which it is involved.

The Eurogroup President, Jeroen Dijsselbloem, has held the post since 21 January 2013 and was re‐elected for a

second term on 13 July 2015. He is the second President in the history of the Eurogroup, and is also Minister for

Finance of the Netherlands, and Chair of the Board of Governors of the ESM. The President of the Eurogroup is a

position of particular importance.

3

The office is held for two and a half years, and the President's powers make the

incumbent central to EU decision‐making in this area. The President sets the agenda, chairs Eurogroup meetings,

and draws up the long‐term work programme. He is the visible face of the Eurogroup, and represents the Eurogroup

in international fora, such as the G7 and IMF. The fact that the current President is also Chair of the Board of

Governors of the ESM adds further to his importance.

There is also a Eurogroup Working Group,

4

which is a preparatory body composed of representatives of the euro

area Member States of the Economic and Financial Committee, the European Commission and the ECB. It provides

assistance to the Eurogroup and its President in preparing ministers' discussions. The Eurogroup Working Group

has a President elected for two years and will normally meet each month, prior to the Eurogroup meetings.

3|POLITICAL POWER

3.1 |Policy and planning

The Eurogroup operates as an informal body in which the ministers discuss matters relating to their countries' com-

mon responsibilities concerning the euro.

5

Its principal task is to ensure close coordination of economic policies

among the euro area Member States and promote conditions for stronger economic growth.

The Eurogroup has, however, played an increasingly important role in decision‐making since the financial crisis.

The reality is that it is central to all major initiatives relating to the euro area, broadly conceived, which cover structural

adjustment, macroeconomic planning, negotiation with states in receipt of aid from the ESM, and aspects of banking

union. The President of the Eurogroup was one of the five Presidents of the report that established the architecture

for reform in the wake of the economic crisis.

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3

http://www.consilium.europa.eu/en/council‐eu/eurogroup/president/role/.

4

http://www.consilium.europa.eu/en/council‐eu/eurogroup/eurogroup‐working‐group/.

5

http://www.consilium.europa.eu/en/council‐eu/eurogroup/how‐the‐eurogroup‐works/.

6

H. Van Rompuy in close collaboration with J. M. Barroso, J‐C. Juncker and M. Draghi, ‘Towards a Genuine Economic and Monetary

Union’(2012); J‐C. Juncker, in close collaboration with D. Tusk, J. Dijsselbloem, M. Draghi and M. Schultz, ‘Comple ting Europe's Eco-

nomic and Monetary Union’(2015).

CRAIG 235