The Unintended Consequences of Intergovernamentalism: ECB and Institutional Change in the Eurocrisis

  • Abstract:

    In the last few years of economic crisis, European Union has witnessed several institutional changes. Though national governments seemed to play a major role in managing the crisis, to a certain extent supranational institutions have seen their power increased. Among them, the European Central Bank is certainly the best example: its participation to the troika and the toolbox of monetary policy outcomes ECB used, have indisputably boosted its prerogatives vis-à-vis member States. The paper claims that, under the pressure of financial and economic instability, the institutional change affecting the ECB was mainly an unintended effect of the intergovernmental phase of the crisis management. Paradoxically, then, the action of European governments, and the consequent failure of the solutions they envisaged, rather than limiting supranationalism, was functional to its increase. The paper stems from the analysis of the limits of intergovernamentalism identified by Fabbrini (2013), arguing that the ECB gained further powers being the only European institution able to bypass those limits. Indeed, thanks to an evolutive – and sometimes contested – interpretation of the institutional rules and the creation of new ones, the ECB reduced the coordination problems among member States, and acted to contain the three dilemmas of veto, enforcement and compliance which emerged during the crisis. As a result of its operations, the ECB succeeded at the same time in calming down the markets and freezing the external pressure on indebted countries, provoking a substantial shift of power from the national to the supranational level. Nevertheless, as a central bank, the ECB is unaccountable to European citizens. Thus, a further limit of intergovernamentalism, the one of legitimacy, rather than eradicated, was actually exacerbate, worsening the already problematic deficit of democracy in the EU. In this sense, the product of the failed intergovernamentalism seems to be a sort of “illegitimate supranationalism”.