Three possible avenues to simplify EMU's governance

Abstract

As of today, the institutional architecture of Europe’s Economic and Monetary Union (EMU) looks more like the hybrid sum of ad-hoc institutions rather than a clear, lean and functional decision-making regime. Its peculiar shape is by and large a legacy of the euro crisis and results from the short-sighted institutional change that ran in parallel to the euro crisis management. Against this background, it is not surprising to see that ‘complexity of policy making’ has been identified by the European Commission as an area where improvement should be made in the future. This policy brief makes the case for streamlining EMU’s governance with a view to making it simpler and more effective. Unlike other contributions which focused on consolidating this institutional chaos via a quantum leap into a ‘deeper EMU’ or a ‘genuine EMU’, this policy brief suggests instead that the burning priority should be to address EMU’s growing complexity, leaving aside the wider philo¬sophic discussion revolving around the possible future of EMU as an autonomous polity. ‘Simpler EMU’, it argues, should be within the EU leadership’s reach. Ten months ago, the EU embarked on a new policy cycle (2014-2019), with new leaders at its command and new priorities set. A well-functioning EMU features high among the issues topping Jean-Claude Juncker’s agenda, only a few miles away from better regulation. Now that the storm of the financial crisis is over, there are indeed no valid reasons left to kick the can down the road any further. Moreover, given the current populist pressures to re-nationalize European policies, it should not be taken for granted that the window of opportunity for institutional re-engineering will be open for too long. Among the many institutional reforms which could be conducted, this paper advocates a rationalization of EMU’s governance on three fronts: the Euro-Summit; the Eurogroup and the EU’s financial assistance function.