The Future of the Euro

Whatever happened to the Eurogroup’s accountability?

Carl Dolan / Feb 2019

Mario Centeno, president of the Eurogroup. Photo: Shutterstock

The Eurogroup is a European body that rose from obscurity during the eruption of the euro crisis a decade ago to become a central actor in the drama of bail-outs and financial assistance given to Cyprus, Greece, Ireland, Portugal and Spain. It was created 20 years ago as an informal forum for discussion and policy coordination on “issues connected with their shared specific responsibilities for the single currency”, fundamentally a talking shop. But who is it accountable to, if anyone? 

The Eurogroup has no headquarters, no staff, no website and is perhaps the only body in Brussels not to have a Twitter account. Importantly, it is not governed by EU treaties. It has both historically and currently managed to evade accountability. The group also denies that it takes any formal decisions, which further complicates attempts to hold it responsible for its actions. 

Decisions that are pre-agreed but ‘not taken’ by the Eurogroup are very often adopted by the Council of the EU without any further debate. If a vote is needed, only euro-area finance ministers participate.  

Another way that decisions can be ‘taken’ by the Eurogroup is through the European Stability Mechanism (ESM). The ESM is a legal entity that escapes EU regulations on transparency and accountability mechanisms such as the EU’s courts, Parliament, or Ombudsman. Who sits on the ESM? You guessed it, the same 19 euro-area finance ministers.  

In all of these aforementioned settings, the same people sit around a different table, vote on, or don’t vote on, decisions that impact millions of lives.

Evidently, finance ministers are accountable to their national governments and electorate and, in some cases, this decentralised accountability can be effective. For example, in theory, it would work if the Eurogroup only takes decisions by unanimity, and when power is balanced between all members. In practice, this is not the case.

In fact, only Germany and France have the resources to sift through all the documents and opinions for each country and all national policies. This means most members take decisions on each other’s national budgets without having the resources to adequately analyse them.  

The superior weight of large members is formalised in the ESM, where decisions about payments can be taken by majority vote rather than consensus, with vote shares weighted by budget contribution. This means that it is easier for larger Member Stated to block decisions. 

Having explored all this and still not having found the Eurogroup’s vanishing accountability, we have set out some incremental changes that we urge the group to adopt. These are as follows: 

On transparency, the Eurogroup should apply the same measures as other EU institutions, to its work, this includes when it meets as the ESM Board of Governors. Its transparency regime and particular the publication of detailed agendas should apply to its preparatory bodies as well. Finally, a document register should be established and all Eurogroup documents should be listed there, even when they are not made public.  

To remedy some of its lack of accountability, the Eurogroup should be formalised as (or into) an EU institution, subjecting it to EU-level accountability rules. The role of the European Parliament in the European Semester should be strengthened decisively by introducing co-decision rights on draft budgetary plans and country-specific recommendations. The Eurogroup President must also be obliged to attend public hearings before Parliament.  

Finally, to increase and to safeguard integrity, a full time Presidency regime needs to be established, which would go a long way in decreasing potential conflicts of interest. The Eurogroup should also introduce a supplementary code of conduct for its members.

We hope to see the Eurogroup finally step out into the light, admit that it is taking decisions that affect millions, and adopt reforms in order to be answerable to Europeans. If we do not enact these reforms in the current, relatively benign economic conditions, what hope is there when we find ourselves, as we surely will, in the teeth of the next crisis?


Carl Dolan

Carl Dolan

February 2019

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