ABSTRACT
This chapter explores the Eurogroup’s early institutional development, which is strongly linked to the shortcomings of economic integration. Historically, the Eurogroup represented a compromise between France and Germany over the question of European economic governance. Its very existence was a concession to French demands of complementing the monetary pillar of European integration with an economic pillar. Yet, the group’s informal design reflected the dominance of the German vision of a Stabilitätsunion, seeking to underpin the EMU with a strong fiscal framework and a monetarist central bank. In its first decade, the Eurogroup mainly acted as a guardian of the Stability and Growth Pact. However, already at this stage, the group carried the potential for playing a more substantial part in the governance of the EMU. The chapter also discusses the Eurogroup’s institutional informality, a combination of non-codification and the absence of public scrutiny. The Eurogroup stands outside of the EU institutional framework, which allows the ministers to avoid jurisdiction and accountability and mitigates market pressure.
