Eurogroupe

The Eurogroupe was born from the need for the countries of the Euro area for acting in concert on the whole of the files concerning the single currency. However, vis-a-vis the reserves of certain Member States except euro area, and with the low capacity of the governments of the euro area to adopt concerted policies, does Eurogroupe have the institutional power necessary to give a strong political governorship to the economy of the euro area?

A need for coordination of the monetary policies of the countries of the euro area

An organization ad hoc created by the European Council in 1997.

Eurogroupe is not a Community institution. Following the installation of the economic Union and monetarist (UEM), the countries of the future euro area test the need to be found to evoke the subjects relating to the euro, without necessarily meeting within the framework of traditional the ECOFIN, which gathers the Ministers for the whole of Member States (EM). Thus, at the end of the second qualificative phase for the entry in the euro, the European Council of Amsterdam (June 1997) creates the eurogroupe. This new organization is described 6 months later in the conclusions of the European Council of Luxembourg (12 December 13rd, 1997): “(…) The Ministers for the States taking part in the euro area can meet between them in an abstract way to discuss related questions to the specific responsibilities which they share as regards single currency. The Commission, like, if necessary, the European Central bank, are invited to take part in the meetings. Each time questions of shared interest are concerned, they are discussed by the ministers of all the Member States. (…) ”.

“The abstract institutionalization ” is carried out gradually

This abstract organization does not even have a name during its creation. They are only three years later that it takes officially the designation of “Eurogroupe”, within the conclusions of the presidency of the Conseil of Nice (7 December 9th, 2000).

However, importance that revêt the UEM for the EM of the euro area the growth to develop this abstract structure. Eurogroupe becomes little by little a formation reduced (but always abstract) of the ECOFIN, which generally meets the session day before of the ECOFIN. During these informal meetings, the EM of the euro area thus prepare the meetings of the Council, which remains the decision-making body economic material and monetarist, according to the procedures defined by the treaty. However, when the Council ECOFIN examines relative files with the euro and the UEM, the representatives of the Member States which do not form part of the euro area do not take part in the vote within the Council. Thus, the EM taking part in Eurogroupe are only decision makers within Conseil ECOFIN for the questions contiguous to the single currency. If institutional reality preserves the entirety of the decisional procedure for the Council, the practice of the European monetary matter decision makes of Eurogroupe its decision-making body. It is thus well about an abstract institutionalization.

An authority of dialog

The operation of Eurogroupe

The members of Eurogroupe are the Ministers for the economy and Finances of the countries of the euro area, to which are added the president of the ECB and a Commission representative. The meetings take place the day before meetings of the Council ECOFIN, (or “the Council Economic affairs and financial”), therefore once a month.

Presidency: Until 2005, Eurogroupe was chaired by the minister whose Member State chaired the EU (or, if this State did not form part of the euro area, by the Minister for the State taking the following presidency of the Council). With the abstract Council ECOFIN of Scheveningen (9/11/2004), the Ministers for Finance decided to introduce the principle of a stable presidency of Eurogroupe for one two years period. Jean-Claude Juncker, Prime Minister and Minister for Finance of Luxembourg, was selected like first president of Eurogroupe, of January 1st, 2005 until December 31st, 2006. During the meeting of Eurogroupe of September 8th, 2006 in Helsinki, it was renewed in its president's function for a two years mandate being completed on December 31st, 2008. The president is assisted by a vice-president who is also the president according to the Council ECOFIN provided that its country is member of the euro area.

Missions of Eurogroupe

Eurogroupe primarily has the role of facilitating the dialog of the EM taking part in the euro area:

as regards economic situation,
in the relations between the Council and the ECB,
in order to prepare the joint positions of the Euro area on the external scene,
in the coordination of the Budget policy .

These missions were widened since the French presidency (European Council of Nice):

with the dialog as regards employment,
and with the structural questions.

Let us recall that Eurogroupe is not an authority of decision.

The president of Eurogroupe has particular missions. He can assist, without right to vote, with the meetings of the Council of the governors of the ECB. But especially, it represents the Ministers for Finance of the Euro area near international agencies like the G7, the Fonds international currency and the the World Bank.

An institution of the EU with whole share

The institutionalization of Eurogroupe could have been realized by the adoption of the constitutional treaty

The existence of Eurogroupe is registered in the draft constitutional treaty to article III-195: “The methods of the meetings between Ministers for the Member States whose currency is the euro are laid down by the protocol on Eurogroupe. ” and in the additional protocol n°12 on Eurogroupe. Although mentioned in the constitutional treaty, there remains an authority of informal discussion, Article I of the protocol n°12: “The Ministers for the Member States whose currency is the euro join together between them in an abstract way”. The constitutional treaty does not modify the operation of Eurogroupe, nor its missions.

Within the Council ECOFIN, which remains the authority décisionnaire, the treaty specifies the specific procedures of vote: only the Member States whose currency is the euro will be able to vote when measurements relate to the Member States of the euro area, as regards budget policy and economic (art.III-194) like for the definition of a representation unified within the institutions and international forums (art.III-196). On this last point, the Council will have to take a decision after consultation of the ECB.

A body of dialog more than necessary vis-a-vis to the lack of dialog of the countries of the euro area

Eurogroupe remains an abstract authority, because its development runs up against the resistance of the Member States except Euro area, the United Kingdom at the head, which do not wish to be isolated decision-making process within the Conseil ECOFIN. Even within the protocol annexed to the constitution project, Eurogroupe thus does not have specific competence.

In addition, the representation of the euro area in the international organizations, in particular against the the IMF, runs up against the dispersion of internal competences, between ECB, Eurogroupe and Commission.

Lastly, the economies of the Euro area present differences structural since the adoption of the single currency, in terms of Growth rate, Rate of inflation, and thus of real interest rate… These differences are followed with precision (and sometimes concern) by the ECB, and they assign to the relevance of a Monetary policy common. Thus, it too much is not an authority of dialog, even abstract, so that the Euro area adopts a true policy concerted and harmonized out of matter budgetary, tax, and in the field of the Job market. However, Eurogroupe, in its current design, does not have institutional competence to influence the Monetary policy, who remains the exclusive competence of the ECB, according to the rules defined by the treaty, in spite of episodical criticisms of the national governments.

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