The Eurogroup: How a Secretive Circle of Finance Ministers Shape European Economic Governance by Uwe Puetter

Author:Uwe Puetter [Puetter, Uwe]
Language: eng
Format: epub
Tags: Public Policy, European, Political Science, World, General
ISBN: 9781847796547
Google: W2S5DwAAQBAJ
Publisher: Manchester University Press
Published: 2013-07-19T08:41:15+00:00

The dialogue with the ECB

The common analysis of the economic situation and the review of budgetary policy involve exchanges between the ECB president (or vice-president) and ministers. In fact, what is generally called the ‘dialogue with the ECB’ takes place in the context of these two agenda items. In both cases the interplay between monetary and economic policy, the euro area’s policy-mix, is an important aspect of the debate. As was demonstrated in Chapter 2 the creation of a framework for informal discussion among economic and monetary policy authorities was one of the main ideas behind the foundation of the Eurogroup. Moreover, much of the controversy on the institutional status of a euro area forum had centred on the issue of whether the envisaged meetings between ministers and the ECB would compromise the political independence of the central bank. The relationship between the Eurogroup and the ECB is one of the rare aspects of the Eurogroup’s work which was discussed in early contributions to the literature on economic governance in Stage 3 (Campanella 2000; Bini Smaghi and Casini 2000). Miriam Campanella (2000) even published her contribution under the title ‘The battle between ECOFIN-11 and the European Central Bank’. More recently, Howarth and Loedel (2003) have raised doubts that the dialogue within the Eurogroup has done much to improve the accountability of the bank. In their study on the ECB the two authors warn that national governments need to be able to express their concerns with regard to the policies of the ECB. Otherwise, national decision-makers might question the legitimacy of the bank’s independence if they feel that their country is disadvantaged by the ECB’s policy (Howarth and Loedel 2003: 124).

In particular, at the time the media coverage suggested that there were continuing tensions between monetary and fiscal authorities during the first years of Stage 3. The first public controversies on the appropriate stance of monetary policy and the necessity of international exchange rate coordination occurred during the second half of 1998 and the first half of 1999. It was the time when euro area ministers gathered for their first meetings within the Eurogroup. One year later several ministers publicly challenged the ECB’s policy in connection with the euro’s slide against the dollar (see above). Finally, in 2001 the Belgian finance minister Didier Reynders used his position as Eurogroup president to quarrel with ECB president Wim Duisenberg over the right to represent the euro area as a political entity in a series of newspaper articles. Both Duisenberg and Reynders claimed the title ‘Mr. Euro’2 for themselves. However, the interviews with Eurogroup members conducted in connection with this study suggest a different picture with regard to the actual discussions within the Eurogroup. The different accounts of the interviewees unanimously point to a stark contrast between the public statements of individual ministers and discussion behaviour inside the group. As one participant in Eurogroup meetings observes

There have been instances in the past where ministers have chosen to express themselves more strongly in the press than in the meeting.

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