ABSTRACT
This chapter outlines the evolvement of the Eurozone since the initiation of economic and monetary union in 1999, which was initially created as an exclusive core grouping comprising 11 Western and Southern EU member states on the basis of the ordoliberal Stability and Growth Pact (SGP) regulatory framework. The last-minute acceptance of Greece’s membership in 2001, just in time for the introduction of the euro as a hard currency, reflected the fact that the provisions of the SGP were in practice not strictly implemented but operated under a soft open method of coordination. In contrast, the new EU member states in Central and Eastern Europe (CEE) faced strict conditionality in their application to join the single currency. Moreover, the reform of the Eurozone governance under Germany’s hegemonial leadership in response to the sovereign debt crisis has moved the Eurozone closer towards becoming a fiscal and ultimately also a political union. This partly explains why, despite substantial progress being made between 2007 and 2015, the eastern enlargement of the Eurozone has recently stalled as formerly keen applicants such as Hungary and Poland have become reluctant to join what they increasingly perceived as a liability union. The chapter offers an analysis of the background and the concrete effects of the strict conditionality the CEE member countries have been facing in their application to join the Eurozone. In this context it compares the economic and political perspectives of current CEE member countries with those that remain on the outside under the changing internal setting of the Eurozone in the wake of the sovereign debt crisis.
