The Eurogroup is a meeting of the
finance ministers of the
eurozone, i.e. those
member states of the
European Union (EU) which have adopted the
euro as
their official
currency. It exercises political control over the currency and
related aspects of the
EU's monetary union such as the
Stability and Growth Pact. Its current president is
Dutch finance minister
Jeroen Dijsselbloem.
The ministers meet
in
camera a day before a meeting of the
Economic and Financial Affairs Council (Ecofin) of the
Council of the European Union. This group is related to the
Council of the European Union (only eurogroup states vote on issues
relating to the euro in Ecofin) and was formalised under the
Lisbon Treaty.
History
The Eurogroup, formerly known as the Euro-X and Euro-XI
in relation to the number of states adopting the euro, was established
at the request of France as a policy co-ordination and consultation
forum on eurozone matters.[1]
The December 1997
European Council endorsed its creation and the first meeting was
held on 4 June 1998 at the Chateau de Senningen in Luxembourg .[2]
To begin with, the chair of the Eurogroup mirrored that of the
rotating Council presidency, except where the Council presidency was
held by a non-eurozone country, in which case the chair was held by the
next eurozone country that would hold the Council presidency.[2]
In 2004 the ministers decided to elect a president (see "President"
below for details) and in 2008, the group held a summit of heads of
state and government, rather than finance ministers, for the first time.[3]
This became known as the
Euro summit and has had irregular meetings during the financial
crisis. In March 2013 the Eurogroup along with the IMF developed the
terms for the imposition of a bank levy on all bank accounts in Cyprus.
This negotiation, which began as a condition for a 10 billion euro loan
to bail out 2 Cyprus banks, led to one of the most controversial
developments in banking over the past one hundred years, government
confiscation of depositors assets- without notice or the opportunity to
democratically consider and pass legislation supporting the
confiscation. The Eurogroup appears to have assumed official status as
an operating unit of the EU.
Since the beginning of the monetary union, its role has grown in
regards to the euro's economic governance. The fact the group meets just
before the Ecofin council means it can pre-agree all Ecofn's decisions
that on Eurozone affairs.[4]
In 2009 the Lisbon Treaty formalised the group and its president.
President
The current president of the group, dubbed Mr Euro[1]
or the president of the eurozone,[5]
is
Jeroen Dijsselbloem (current
Minister of Finance of the
Netherlands).
In September 2004, the Eurogroup decided it should have a
semi-permanent president that is to be appointed for a period of two
years. Finance Minister and then
Prime Minister of Luxembourg
Jean-Claude Juncker was appointed first president of the Eurogroup,
mandated from 1 January 2005, until 31 December 2006, and was
re-appointed for a second term in September 2006.[6]
Under the Lisbon Treaty, this system was formalised (see "legal basis"
below) and Juncker was confirmed for another term.[7]
The Presidency has helped the strengthening of the group, as before
Juncker's appointment the Eurogroup was only 'accidentally' present at
meetings in the
European Parliament. Since the creation of the Presidency, the
president attends Parliament's
committee on Economic and Monetary Affairs every six months.[4]
After his reappointment as Eurogroup president in January 2010,
Juncker emphasised the need to increase the scope of the Eurogroup's
activities. In particular in terms of co-ordinating economic policies
and representation. Juncker proposed creating a small secretariat for
the group of four to five civil servants to prepare the meetings.
However although France and Spain support such plans, Germany is worried
that strengthening the group could undermine the independence of the
European Central Bank.[8]
In June 2012, the Estonian minister
Jürgen Ligi was being considered as a possible successor for Mr.
Juncker.[9]
As of January 2013, Juncker hinted that his probable successor would be
Jeroen Dijsselbloem,[10]
who was appointed second president of the Eurogroup on 21 January 2013.[11]
Members
Eurogroup members as of November 2012.[12]
The
ECB President,
Economic and Monetary Affairs Commissioner and Chairman of the
Eurogroup Working Group also attend the meetings. It is worthwhile to
note that the members of the EU who choose not to participate in the
Euro (UK, Sweden, the Czech Republic, Denmark, etc.) have been excluded
from observer status. The membership is very fluid. For example, IMF
personnel such as
Christine Lagarde are sometimes allowed to be present at
meetings—see
Lagarde statement 20130316. What remains unknown about this very
ad-hoc group is whether they allow observers to speak or speech by the
observers is forbidden.
Legal basis
Prior to the
Lisbon Treaty, the Eurogroup had no legal basis. This had some
advantages as, because it was not a Council formation, it is smaller and
more informal resulting in more constructive and confidential
discussions than the full Ecofin Council. It also means that it does not
have the usual rotating six-month presidency meaning its work is
streamlined and strengthened vs the other institutions.[4]
A formal legal basis was granted for the first time under the Lisbon
Treaty when it came into force on 1 December 2009.
Protocol 14 of the treaty lays out just two articles to govern the
group;
Article 1: The Ministers of the Member States whose
currency is the euro shall meet informally. Such meetings shall
take place, when necessary, to discuss questions related to the
specific responsibilities they share with regard to the single
currency. The Commission shall take part in the meetings. The
European Central Bank shall be invited to take part in such
meetings, which shall be prepared by the representatives of the
Ministers with responsibility for finance of the Member States
whose currency is the euro and of the Commission.
Article 2: The Ministers of the Member States whose
currency is the euro shall elect a president for two and a half
years, by a majority of those Member States.
—Protocol 14 of the Consolidated Treaties of the European Union
(as amended by the Treaty of Lisbon)
[13]
Furthermore, the treaty amended the Council of the EU's rules so that
when the full Ecofin council votes on matters only affecting the
eurozone, only those states using the euro (the Eurogroup countries) are
permitted to vote on it.[14]
Representation
On 15 April 2008 in Brussels, Juncker suggested that the eurozone
should be represented at the
International Monetary Fund as a bloc, rather than each member state
separately: "It is absurd for those 15 countries not to agree to have a
single representation at the IMF. It makes us look absolutely
ridiculous. We are regarded as buffoons on the international scene."[15]
However
Finance Commissioner
Joaquin Almunia stated that before there is common representation, a
common political agenda should be agreed.[15]
In January 2010 Juncker indicated that the Commission is to propose that
the group become a member of the
G20.[8]
Economic
government
In 2008, in light of the
2008 financial crisis,
French President
Nicolas Sarkozy (speaking at the
European Parliament as the outgoing
President of the European Council) called the Eurogroup to be
replaced by a "clearly identified economic government" for the eurozone,
stating it was not possible for the eurozone to continue without it. The
eurozone economic government would discuss issues with the European
Central Bank, which would remain independent.[16]
This government would come in the form of a regular meeting of the
eurozone heads of state and government (similar to the
European Council) rather than simply the finance ministers which
happens with the current Eurogroup. Sarkozy stated that "only heads of
state and government have the necessary democratic legitimacy" for the
role. This idea was based on the meeting of eurozone leaders in 2008 who
met to agree a co-ordinated eurozone response to the banking crisis.[3]
This is in contrast to an early proposal from former
Belgian Prime Minister
Guy Verhofstadt who saw the
European Commission taking a leading role in a new economic
government, something that would be opposed by the less
integrationist states.[1]
Sarkozy's proposal was opposed by Eurogroup chair Jean-Claude Juncker
who did not think Europe was ripe for such a large step at the time[1]
and opposition from Germany killed off the proposal.[3][17]
Merkel approved of the idea of an economic government, but for the whole
of the EU, not just the eurozone as doing so could split the EU and
relegate non-eurozone states to second class members.[17]
In his 2011
State of the Union address,
Commission President
José Manuel Barroso opposed the Franco-German intergovernmental
plan, stating that community institutions should perform that role.
See also