Supranational Agents as De-Commitment Devices: The ECB During the Eurozone Crisis

Abstract

We argue that the independent agency of EU institutions can serve not only to tie the member states to previous policy commitments, as argued in the extant literature, but also to untie member states from commitments that have become outdated and harmful. The European Central Bank saved the Euro in 2012 not by enforcing the monetary financing prohibition or the no-bail-out clause of the Treaty more strictly but by flouting them. We develop our de-commitment account of supranational agency theoretically, show its workings empirically by a case study of the Eurozone crisis, and discuss its scope conditions. We surmise that supranational de-commitment is a common feature of EU politics.