Contested Governance: The Impact of EU-Level Debates on the Eurozone Crisis

Europe’s Economic and Monetary Union has changed in complex ways since the outbreak of the Eurozone crisis. National and EU officials have strengthened the rules of the Eurozone, but they have also built new firewalls to preserve its integrity. This article traces such institutional innovations back to a renewed debate over “governance”.  German and French officials held different views of how the Eurozone should be governed, but their views were not static. Despite moments of apparent gridlock, the continuing EU debate under intense market pressures eventually produced innovations that typically mixed austerity and unconventional remedies.  While national officials played the dominant roles, their actions are better understood in terms of intersecting domestic political debates than in terms of material interests. Furthermore, the actions of EU officials, especially at the ECB, also shaped these debates in subtle yet significant ways. The resulting Eurozone institutional framework is ultimately much more ambiguous than its usual portrayal by critical as well as rationalist scholars.