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THE EUROPEAN PARLIAMENT AND ITS INITIATIVE AND OVERSIGHT CAPACITY. THE POLITICAL AGENDA OF THE EUROPEAN COUNCIL...
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hand, there has been a process of confederalisa-
tion, far removed from the federalist dream,
with a growing influence of the European
Council. However, and above all in the sphere of
banking regulation and supervision, the Union
has also moved towards greater
communitarisa-
tion
, providing itself with new institutions that,
like the ECB, are genuinely federal in nature.
True, if we had to measure the strength of the
two vectors, the federalist one has not been so
intense, but in the current term the debate over
how to “Europeanise” and institutionalise some
of the decisions taken recently is now on the
political agenda.
We will begin with the growing role of the
Eurogroup, first explaining its nature. The Euro-
group can be described as a satellite institution
of the Council, but made up of the economy
and finance ministers of those Member States
that share the Union’s currency, the euro. This
institution is not an official body of the Union,
but simply a more or less informal forum of the
economics
ministers of the euro countries. It has
no legislative functions, given that they are vest-
ed in the Council, where all the Member States
are present, but nor are they directly executive
within the framework of the Union, because the
Eurogroup is not the European Council. It is im-
portant to point out that the Council made up
of the Economy ministers is called ECOFIN,
which is not to be confused with the Eurogroup.
Apart from that, the Eurogroup presidency is
held by one of the economy ministers of the
Eurozone members on a non-permanent basis,
that is to say, part-time. Until the start of the
crisis, the forum certainly did carry less weight
in the Union’s institutional design, given its
un-
official
nature, but its power has been growing
over the last few years.
The reason behind the increase in the Euro-
group’s political power lies in the rescue packages
that have been implemented in Greece, Ireland,
Portugal, Cyprus and Spain. A good part of the
funding for those rescues has not gone through
the channels of the European institutions, but
was provided directly or through mechanisms
created ad hoc by the Member States. In this
way, in that it was not the Union’s institutions
that provided the loans to those economies,
but the euro countries, through various funds
in the face of the risks posed to the single cur-
rency by a potential domino effect of sovereign
defaults, it has been the Eurogroup –as the fo-
rum of those governments– that has played the
central role.
Under those circumstances and on a tempo-
rary basis, the European Financial Stability Facil-
ity –with capital made available by the Eurozone
Member States– and the European Financial
Stability Mechanism –funded by debt issues
guaranteed by the Commission with its budget–
were created in 2010. Later, in 2012, the ESM
was created to establish a permanent fund for
tackling rescue processes for Member States
and also to establish a channel for the direct
capitalisation of financial institutions. To do so,
the Treaty on the Functioning of the European
Union was amended to allow potential bailouts
through the ESM and the Mechanism itself was
created, with a supplementary treaty signed ex-
clusively by the members of the Eurozone. Obvi-
ously, the chair of the ESM board of governors
was occupied by the president of the Euro-
group, with a managing director who runs the
organisation.
Hence the funding of the rescues did not fol-
low the community method, but the intergov-
ernmental approach that inspired the policies to
counter the economic crisis, at least until mid-
2012. Those rescues were implemented by the
troika
: the Commission, by delegation of the
Member States; the International Monetary