Europeanizing the Eurozone

Abstract

The negotiations of the third Greek bailout revealed the deep structural problem of European governance: its insufficient constitutionalization. The roots of this problem can be traced back to the 1970s and the creation of the European Council, which soon superseded the (other) EU institutions. In 1997 its analogue for the Eurozone, the Euro Group, was established. The architects of this solution thought that the triumvirate of France, Germany, and the UK would naturally assume leadership. However, the Euro-crisis, UK’s abstention from the third stage of the EMU, and the weakened position of France left Germany in charge.

At this point, the specificities of the German constitutional system have come into play. With the Maastricht decision, the German Constitutional Court shifted its review of EU acts from the protection of human rights perspective to the protection of the “substantive content” of right to vote. The German citizen, instead of an individual, became the focal point of the review. Every German intrastate institution is obliged to promote this constitutional perspective at the European stage. As a result, the major veto players of Eurozone governance are four different and relatively independent German intrastate institutions. The "European" solutions thus depend primarily on the compromise reached between the German Chancellor, the Bundestag, the Constitutional Court and the Bundesbank.

Keywords: Eurozone; Euro-crisis; Germany; constitution; federalism