Monday

10th May 2021

The rise of the untransparent 'Eurogroup'

  • Jeroen Dijsselbloem - not legally obliged to appear in front of any parliament in his role as Eurogroup president (Photo: consilium.europa.eu)

The Eurogroup has emerged as a key body in the EU's evolving economic governance, playing a major role in the current dispute with Greece over further bailout money, yet it is democratically accountable to no one.

Legally-speaking the monthly forum for eurozone finance ministers has a narrow remit: It is not an EU institution and it cannot adopt legally binding decisions.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

But the scale of the economic and financial crisis of the recent years and the resulting swathe of laws to try and ensure such a crisis never happens have turned it into a de facto player in EU's fledgling economic governance system.

Its role was enhanced by the so-called six-pack of laws - which strengthens the rules underpinning the euro - and then further by the two-pack - which bolsters economic surveillance in the single currency states. Its meetings see discussions on draft national budgets and bailout programmes and are attended by the euro commissioner and the European Central Bank.

The latest manifestation of its power is the ongoing battle between Greece and its lenders over what reforms Athens has to carry out in order to get a much-needed pay-out of bailout money.

The money will only be released once the Eurogroup gives the green light.

Yet its decisions have no legal effect - something the EU court spelt out recently in response to an attempt to overturn the Cyprus bailout and its conditions, including an unprecedented raiding of savers' accounts.

Rene Repasi, a professor at Leiden University, notes the transparency vacuum in which the Eurogroup operates.

"There is a no legal obligation of the Eurogroup to inform the public or other institutions about its activities. There are no transparency rules for the Eurogroup. There are no minutes of its meetings."

Speaking to MEPs in the constitutional affairs committee on Tuesday (5 May), Repasi also pointed out that Jeroen Dijsselbloem, the Eurogroup president, is "not obliged" to appear in front of any parliamentary body nor does he have to worry about any "consequences" if the Eurogroup makes a bad decision.

Daniela Schwarzer from the German Marshall Fund said the "parliamentary component lags behind" in Eurozone decision-making.

She noted that empowering national parliaments is not necessarily the solution, pointing to the fact that the German parliament has become a "de facto veto player" in all substantial decisions following a series of rulings by the country's constitutional court.

"If you look at it from a trans-European perspective you may ask yourself how legitimate it is to have such veto players in national contexts."

Taking a wider look at accountability in eurozone governance, Schwarzer notes that 'democratic legitimacy' can mean different things to different member states.

In Greece, it centers on the fact that while the government has changed - a radical left party was elected to power in January - it appears not possible to change policy.

But in Germany there is irritation that euro "rules that are there to be applied are not being applied in the way that is anticipated".

How much economic governance?

Meanwhile, economist Daniel Gros, from the CEPS thinktank, raised some fundamental questions about the nature of economic governance.

He said economic policy co-ordination "makes sense" when there is a crisis, but questioned how much it is needed if there is no crisis.

“Let’s take the famous structural reforms. Very often it is said – ‘Germany, please reform your services so that your productivity in services increases. Then there will be more investment and demand and other countries will benefit'.”

But, said Gros, the exact opposite argument could also be made. Services reform could make Germany more competitive and result in it importing less from other countries “so the others could lose”.

He said such examples illustrative the “practical problems you face when you think of running an economic policy for the entire area".

Gros cautioned against an overly prescriptive economic governance policy outside times of crisis.

"One should be very careful in not overloading mechanisms for economic governance by trying to achieve too much coordination on things that we, in Brussels, think are perhaps good and useful but for which we cannot really be certain about the strong spillover effects."

Eurogroup, Greece fail to agree on bailout extension

A first meeting between the new Greek finance minister and his eurozone peers ended without a joint statement, as Athens is still refusing to accept an extension of its bailout programme.

Eurogroup keeps alive hope of Greek deal

Eurozone finance ministers on Monday welcomed progress in talks between Greece and its lenders but could not say when a deal will be possible.

Opinion

Deepening Eurozone integration

A report on deepening eurozone integration is being prepared for June's EU summit. "Let’s focus on stability first," recommends the Czech Republic.

News in Brief

  1. Lukashenko amends emergency transfer of power
  2. German centre-left picks Scholz as would-be chancellor
  3. EU has not ordered AstraZeneca vaccines beyond June
  4. Macron: Pandemic showed need for more EU integration
  5. Election win fuels Scottish nationalists' referendum plan
  6. Surge in migrant arrivals to Italian island
  7. EU embassy pays bail for Georgia opposition leader
  8. British aristocrats caught peddling Kremlin ties

Vietnam jails journalist critical of EU trade deal

A journalist who had demanded the EU postpone its trade deal with Vietnam until human rights improved has been sentenced to 15 years in jail. The EU Commission says it first needs to conduct a detailed analysis before responding.

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic Council enters into formal relations with European Parliament
  2. Nordic Council of MinistersWomen more active in violent extremist circles than first assumed
  3. Nordic Council of MinistersDigitalisation can help us pick up the green pace
  4. Nordic Council of MinistersCOVID19 is a wake-up call in the fight against antibiotic resistance
  5. Nordic Council of MinistersThe Nordic Region can and should play a leading role in Europe’s digital development
  6. Nordic Council of MinistersNordic Council to host EU webinars on energy, digitalisation and antibiotic resistance

Latest News

  1. EU and US urge Israel to defuse Jerusalem violence
  2. Frontex 'mislabelling minors as adults' on Greek islands
  3. Has Albania really met the 15 tests to join the EU? No
  4. Vaccine fairness plus Russia on table This WEEK
  5. EU ambassadors flock to Red Square for Putin's parade
  6. MEPs win battle for bigger citizens' voice at Conference
  7. Hungary gags EU ministers on China
  8. Poland and Hungary push back on 'gender equality' pre-summit

Join EUobserver

Support quality EU news

Join us