ABSTRACT
This chapter examines why the Eurogroup used its influence to pursue an austerity-political agenda and how this has modified the EMU’s political economy. The distribution of interests within the group was predetermined by a divide between the northern and southern economies as well as a creditor-debtor structure that weakened the program countries. Yet, what also played a role was economic ideology. A quantitative analysis of official documents reveals an unequivocal dominance of supply-side preferences within the Eurogroup. As a particularly interesting finding, little variation is measured in the distribution of policy recommendations to different members. The austerity project rests on two mutually reinforcing pillars – crisis constitutionalism and adjustment programs – both of which are discussed in more detail. Generally, the chapter finds that the austerity project was particularly pronounced and interventionist in the periphery, yet clearly had the ambition to restructure the eurozone in its entirety. It did not break with the previous integration path but put additional emphasis on the downsizing of the welfare state and a common export-oriented globalization agenda for Europe.
