Euro Group
Encyclopedia
The Euro Group or Eurogroup is a meeting of the finance minister
s of the eurozone
(i.e., those member states of the European Union (EU) which have adopted the euro as their official currency). It is the political control over the euro
currency and related aspects of the EU's monetary union
such as the Stability and Growth Pact
. Its current President is Jean-Claude Juncker
.
The ministers meet a day before a meeting of the Economic and Financial Affairs Council (Ecofin)
of the Council of the European Union
. This group is related to the Council of the European Union
(only eurogroup states vote on issues relating to the euro in Ecofin) and was formalised under the Lisbon Treaty.
endorsed its creation and the first meeting was held on 4 June 1998 at the Chateau de Senningen in Luxembourg .
To begin with, the chair of the eurogroup mirrored that of the rotating Council presidency
, except where the Council presidency was held by a non-eurozone country, in which case the chair was held by the next eurozone country that would hold the Council presidency. In 2004 the ministers decided to elect a President (see "President" below for details) and in 2008, the group held a summit of heads of state and government, rather than finance ministers, for the first time. This became known as the Euro summit
and has had irregular meetings during the financial crisis.
Since the beginning of the monetary union, its role has grown in regards to the euro's economic governance. The fact the group meets just before the Ecofin council means it can pre-agree all Ecofn's decisions that on Eurozone affairs. In 2009 the Lisbon Treaty formalised the group and its president.
(former finance minister and current Prime Minister of Luxembourg).
In September 2004, the Eurogroup decided it should have a semi-permanent president that is to be appointed for a period of two years. Prime Minister and then-Finance Minister of Luxembourg Jean-Claude Juncker
was appointed first president of the Eurogroup, mandated from 1 January 2005, until 31 December 2006, and was re-appointed for a second term in September 2006. Under the Lisbon Treaty, this system was formalised (see "legal basis" below) and Juncker was confirmed for another term.
The Presidency has helped the strengthening of the group, as before Juncker’s appointment the Eurogroup was only ‘accidentally’ present at meetings in the European Parliament
. Since the creation of the Presidency, the president attends Parliament's committee on Economic and Monetary Affairs
every six months.
After his reappointment a euro group president in January 2010, Juncker emphasised the need to increase the scope of the Euro Group's activities. In particular in terms of co-ordinating economic policies and representation. Juncker proposed creating a small secretariat for the group in the council of four to five civil servants to prepare the meetings. However although France and Spain support such plans, Germany is worried that strengthening the group could undermine the independence of the European Central Bank
.
A formal legal basis was granted for the first time under the Lisbon Treaty when it came into force on 1 December 2009. Protocol 14 of the treaty lays out just two articles to govern the group;
Furthermore, the treaty amended the Council of the EU's rules so that when the full Ecofin council votes on matters only affecting the eurozone, only those states using the euro (the Eurogroup countries) are permitted to vote on it.
as a bloc, rather than each member state separately: "It is absurd for those 15 countries not to agree to have a single representation at the IMF. It makes us look absolutely ridiculous. We are regarded as buffoons on the international scene." However Finance Commissioner
Joaquin Almunia
stated that before there is common representation, a common political agenda should be agreed. In January 2010 Juncker indicated that the Commission is to propose that the group become a member of the G20.
(speaking at the European Parliament
as the outgoing President of the European Council
) called the Eurogroup to be replaced by a "clearly identified economic government" for the eurozone, stating it was not possible for the eurozone to continue without it. The eurozone economic government would discuss issues with the European Central Bank, which would remain independent.
This government would come in the form of a regular meeting of the eurozone heads of state and government (similar to the European Council
) rather than simply the finance ministers which happens with the current Eurogroup. Sarkozy stated that "only heads of state and government have the necessary democratic legitimacy" for the role. This idea was based on the meeting of eurozone leaders in 2008 who met to agree a co-ordinated eurozone response to the banking crisis.
This is in contrast to an early proposal from former Belgian Prime Minister Guy Verhofstadt
who saw the European Commission
taking a leading role in a new economic government, something that would be opposed by the less integrationist states. Sarkozy's proposal was opposed by Eurogroup chair Jean-Claude Juncker who does not think Europe is ripe for such a large step and opposition from Germany killed off the proposal. Merkel approved of the idea of an economic government, but for the whole of the EU, not just the eurozone as doing so could split the EU and relegate non-eurozone states to second class members.
In his 2011 State of the Union address, Commission President
José Manuel Barroso opposed the Franco-German intergovernmental plan, stating that community institutions should perform that role.
Finance minister
The finance minister is a cabinet position in a government.A minister of finance has many different jobs in a government. He or she helps form the government budget, stimulate the economy, and control finances...
s of the eurozone
Eurozone
The eurozone , officially called the euro area, is an economic and monetary union of seventeen European Union member states that have adopted the euro as their common currency and sole legal tender...
(i.e., those member states of the European Union (EU) which have adopted the euro as their official currency). It is the political control over the euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
currency and related aspects of the EU's monetary union
Economic and Monetary Union of the European Union
The Economic and Monetary Union is an umbrella term for the group of policies aimed at converging the economies of members of the European Union in three stages so as to allow them to adopt a single currency, the euro. As such, it is largely synonymous with the eurozone.All member states of the...
such as the Stability and Growth Pact
Stability and Growth Pact
The Stability and Growth Pact is an agreement among the 27 Member states of the European Union that take part in the Eurozone, to facilitate and maintain the stability of the Economic and Monetary Union...
. Its current President is Jean-Claude Juncker
Jean-Claude Juncker
Jean-Claude Juncker is a Luxembourg politician, 23rd and current Prime Minister of Luxembourg, since 20 January 1995. He is the longest standing head of government of any European Union state...
.
The ministers meet a day before a meeting of the Economic and Financial Affairs Council (Ecofin)
Economic and Financial Affairs Council
The Economic and Financial Affairs Council is one of the oldest configurations of the Council of the European Union and is composed of the Economics and Finance Ministers of the 27 European Union member states, as well as Budget Ministers when budgetary issues are discussed.ECOFIN often works with...
of the Council of the European Union
Council of the European Union
The Council of the European Union is the institution in the legislature of the European Union representing the executives of member states, the other legislative body being the European Parliament. The Council is composed of twenty-seven national ministers...
. This group is related to the Council of the European Union
Council of the European Union
The Council of the European Union is the institution in the legislature of the European Union representing the executives of member states, the other legislative body being the European Parliament. The Council is composed of twenty-seven national ministers...
(only eurogroup states vote on issues relating to the euro in Ecofin) and was formalised under the Lisbon Treaty.
History
The group has no official name, but is colloquially called the "Euro Group" (formerly Euro-X and then Euro-XI in relation to the number of states adopting the euro), was established at the request of France as a policy co-ordination and consultation forum on eurozone matters. The December 1997 European CouncilEuropean Council
The European Council is an institution of the European Union. It comprises the heads of state or government of the EU member states, along with the President of the European Commission and the President of the European Council, currently Herman Van Rompuy...
endorsed its creation and the first meeting was held on 4 June 1998 at the Chateau de Senningen in Luxembourg .
To begin with, the chair of the eurogroup mirrored that of the rotating Council presidency
Presidency of the Council of the European Union
The Presidency of the Council of the European Union is the responsibility for the functioning of the Council of the European Union that rotates between the member states of the European Union every six months. The presidency is not a single president but rather the task is undertaken by a national...
, except where the Council presidency was held by a non-eurozone country, in which case the chair was held by the next eurozone country that would hold the Council presidency. In 2004 the ministers decided to elect a President (see "President" below for details) and in 2008, the group held a summit of heads of state and government, rather than finance ministers, for the first time. This became known as the Euro summit
Euro summit
The Euro summit is the meeting of the heads of state or government of the member states of the eurozone...
and has had irregular meetings during the financial crisis.
Since the beginning of the monetary union, its role has grown in regards to the euro's economic governance. The fact the group meets just before the Ecofin council means it can pre-agree all Ecofn's decisions that on Eurozone affairs. In 2009 the Lisbon Treaty formalised the group and its president.
President
The current president of the group, dubbed Mr Euro or the president of the eurozone,Other usage of the term if needed: http://www.europeanvoice.com/article/2010/01/juncker-re-appointed-as-eurogroup-president/66911.aspx http://www.euro-area.org/blog/?p=33 http://www.eurointelligence.com/article.581+M55ca4c385ce.0.html is Jean-Claude JunckerJean-Claude Juncker
Jean-Claude Juncker is a Luxembourg politician, 23rd and current Prime Minister of Luxembourg, since 20 January 1995. He is the longest standing head of government of any European Union state...
(former finance minister and current Prime Minister of Luxembourg).
In September 2004, the Eurogroup decided it should have a semi-permanent president that is to be appointed for a period of two years. Prime Minister and then-Finance Minister of Luxembourg Jean-Claude Juncker
Jean-Claude Juncker
Jean-Claude Juncker is a Luxembourg politician, 23rd and current Prime Minister of Luxembourg, since 20 January 1995. He is the longest standing head of government of any European Union state...
was appointed first president of the Eurogroup, mandated from 1 January 2005, until 31 December 2006, and was re-appointed for a second term in September 2006. Under the Lisbon Treaty, this system was formalised (see "legal basis" below) and Juncker was confirmed for another term.
The Presidency has helped the strengthening of the group, as before Juncker’s appointment the Eurogroup was only ‘accidentally’ present at meetings in the European Parliament
European Parliament
The European Parliament is the directly elected parliamentary institution of the European Union . Together with the Council of the European Union and the Commission, it exercises the legislative function of the EU and it has been described as one of the most powerful legislatures in the world...
. Since the creation of the Presidency, the president attends Parliament's committee on Economic and Monetary Affairs
Committee on Economic and Monetary Affairs
The Committee on Economic and Monetary Affairs is a committee of the European Parliament.Since Economic and Monetary Union , the most important function of this Committee has been in relation to the European Central Bank . Although guaranteed independence under the Treaty, the ECB is accountable...
every six months.
After his reappointment a euro group president in January 2010, Juncker emphasised the need to increase the scope of the Euro Group's activities. In particular in terms of co-ordinating economic policies and representation. Juncker proposed creating a small secretariat for the group in the council of four to five civil servants to prepare the meetings. However although France and Spain support such plans, Germany is worried that strengthening the group could undermine the independence of the European Central Bank
European Central Bank
The European Central Bank is the institution of the European Union that administers the monetary policy of the 17 EU Eurozone member states. It is thus one of the world's most important central banks. The bank was established by the Treaty of Amsterdam in 1998, and is headquartered in Frankfurt,...
.
Members
Eurogroup members as of September 2011. The ECB President, Economic and Monetary Affairs Commissioner and Chairman of the Eurogroup Working Group also attend the meetings.| Representing | Member |
|---|---|
 Austria |
Maria Fekter Maria Fekter Maria Theresia Fekter is an Austrian politician and since 2011 the current Austrian Minister of Finance. Before that, she used to be Minister of the Interior... |
 Belgium |
Didier Reynders Didier Reynders Didier J.L. Reynders is a Belgian politician and a member of the Mouvement Réformateur . He is Belgian Deputy Prime Minister and Minister for Finance and Institutional Reforms in the Van Rompuy I Government, which took office on 30 December 2008.He was born in Liège as the youngest in a family of... |
 Cyprus |
Kikis Kazamias |
 Estonia |
Jürgen Ligi Jürgen Ligi Jürgen Ligi is an Estonian politician, a member of the liberal Reform Party.He is a long-time member of the Estonian parliament Riigikogu . For the last two years in the Riigikogu he served as the chairman of the Parliamentary Committee for Budget Control.From 2005 to 2007 Jürgen Ligi was Minister... |
 Finland |
Jutta Urpilainen Jutta Urpilainen Jutta Pauliina Urpilainen is the current Minister of Finance of Finland and the Chairperson of the Social Democratic Party of Finland . She was elected in June 2008 as the first female chairperson of the SDP.... |
 Early Modern France |
François Baroin François Baroin François Baroin is a French politician, recently appointed Finance Minister, following a stint as Minister of the Budget in the François Fillon III government... |
 Germany |
Wolfgang Schäuble Wolfgang Schäuble Wolfgang Schäuble is a German politician of the Christian Democratic Union , currently serving as the Federal Minister of Finance in the Second Cabinet Merkel.... |
 Greece |
Evangelos Venizelos Evangelos Venizelos Evangelos Venizelos is a Greek politician, currently Deputy Prime Minister and Minister for Finance of Greece since 17 June 2011... |
 Republic of Ireland |
Michael Noonan Michael Noonan Michael Noonan is an Irish Fine Gael politician and has been the Minister for Finance since March 2011. He has been a Teachta Dála for the Limerick East and later Limerick City constituencies since 1981.... |
 Italy |
Mario Monti Mario Monti Mario Monti is an Italian economist and academic who is Prime Minister of Italy, as well as Minister of Economy and Finance, since November 2011. Monti served as a European Commissioner from 1995 to 2004, with responsibility for the Internal Market, Services, Customs and Taxation from 1995 to 1999... |
 Luxembourg |
Luc Frieden Luc Frieden Luc Frieden is a Luxembourgian politician for the Christian Social People's Party . He was Minister for Justice and Minister for the Treasury and Budget from 1998 to 2009, and has been Minister for Finances since 23 July 2009.In the capacity of Minister for the Treasury and Budget, Frieden was... |
 Malta |
Tonio Fenech Tonio Fenech Tonio Fenech is a Maltese politician who has served in the government of Malta as Minister of Finance, Economy and Investment since 2008. He was Mayor of Birkirkara from 1998 to 2003.-Education:... |
 Netherlands |
Jan Kees de Jager Jan Kees de Jager Jan Cornelis "Jan Kees" de Jager is a Dutch politician of the Christian Democratic Appeal . He is the Minister of Finance first in the Cabinet Balkenende IV from February 23, 2010 until October 14, 2010, and in the Cabinet Rutte since that date.He previously served as State Secretary for Finance... |
 Portugal |
Vítor Gaspar Vítor Gaspar Vítor Gaspar was an adviser to the Bank of Portugal since February 2010, having been from 2007 Director-General at the Bureau of European Policy Advisers with the President of the European Commission. Previously he was Director-General for Research at the European Central Bank for six years. He is... |
 Slovakia |
Ivan Mikloš Ivan Mikloš Ivan Mikloš is the incumbent Minister of Finance of Slovakia, appointed on July 9, 2010. He previously served as Slovakia's Minister of Finance from 2002 to 2006 and Deputy Prime Minister for Economy between 1998 and 2002.... |
 Slovenia |
Franc Križanič |
 Spain |
Elena Salgado Elena Salgado Elena Salgado Méndez is a Spanish politician currently serving as the First Vice President and Minister of Economy and Finance of Spain, in the government of José Luis Rodríguez Zapatero... |
 President of the EurogroupNon-voting member |
Jean-Claude Juncker Jean-Claude Juncker Jean-Claude Juncker is a Luxembourg politician, 23rd and current Prime Minister of Luxembourg, since 20 January 1995. He is the longest standing head of government of any European Union state... |
| President of the Central Bank Non-voting member |
Mario Draghi Mario Draghi Mario Draghi is an Italian banker and economist who succeeded Jean-Claude Trichet as President of the European Central Bank on 1 November 2011... |
| Commissioner for Economic and Monetary Affairs and the Euro Non-voting member |
Olli Rehn Olli Rehn Olli Ilmari Rehn is a Finnish politician, currently serving as European Commissioner for Economic and Financial Affairs. He had previously served as Commissioner for Enlargement... |
| Chairperson of the Eurogroup Working Group Non-voting member |
Vittorio Grilli |
Legal basis
Prior to the Lisbon Treaty, the Eurogroup had no legal basis. This had some advantages as, because it was not a Council formation, it is smaller and more informal resulting in more constructive and confidential discussions than the full Ecofin Council. It also means that it does not have the usual rotating six-month presidency meaning its work is streamlined and strengthened vs the other institutions.A formal legal basis was granted for the first time under the Lisbon Treaty when it came into force on 1 December 2009. Protocol 14 of the treaty lays out just two articles to govern the group;
Furthermore, the treaty amended the Council of the EU's rules so that when the full Ecofin council votes on matters only affecting the eurozone, only those states using the euro (the Eurogroup countries) are permitted to vote on it.
Representation
On 15 April 2008 in Brussels, Juncker suggested that the eurozone should be represented at the International Monetary FundInternational Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
as a bloc, rather than each member state separately: "It is absurd for those 15 countries not to agree to have a single representation at the IMF. It makes us look absolutely ridiculous. We are regarded as buffoons on the international scene." However Finance Commissioner
European Commissioner for Economic & Financial Affairs
The Commissioner for Economic and Monetary Affairs and the Euro is the member of the European Commission responsible for economic and financial affairs. The current Commissioner is Olli Rehn .-Responsibilities:...
Joaquin Almunia
Joaquín Almunia
Joaquín Almunia Amann is a Spanish politician and prominent member of the European Commission, currently responsible for Competition under the second mandate of President Barroso. He was previously responsible for Economic and Monetary Affairs in Barroso's previous mandate...
stated that before there is common representation, a common political agenda should be agreed. In January 2010 Juncker indicated that the Commission is to propose that the group become a member of the G20.
Economic government
In 2008, in light of the 2008 financial crisis, French President Nicolas SarkozyNicolas Sarkozy
Nicolas Sarkozy is the 23rd and current President of the French Republic and ex officio Co-Prince of Andorra. He assumed the office on 16 May 2007 after defeating the Socialist Party candidate Ségolène Royal 10 days earlier....
(speaking at the European Parliament
European Parliament
The European Parliament is the directly elected parliamentary institution of the European Union . Together with the Council of the European Union and the Commission, it exercises the legislative function of the EU and it has been described as one of the most powerful legislatures in the world...
as the outgoing President of the European Council
President of the European Council
The President of the European Council is a principal representative of the European Union on the world stage, and the person presiding over and driving forward the work of the European Council...
) called the Eurogroup to be replaced by a "clearly identified economic government" for the eurozone, stating it was not possible for the eurozone to continue without it. The eurozone economic government would discuss issues with the European Central Bank, which would remain independent.
This government would come in the form of a regular meeting of the eurozone heads of state and government (similar to the European Council
European Council
The European Council is an institution of the European Union. It comprises the heads of state or government of the EU member states, along with the President of the European Commission and the President of the European Council, currently Herman Van Rompuy...
) rather than simply the finance ministers which happens with the current Eurogroup. Sarkozy stated that "only heads of state and government have the necessary democratic legitimacy" for the role. This idea was based on the meeting of eurozone leaders in 2008 who met to agree a co-ordinated eurozone response to the banking crisis.
This is in contrast to an early proposal from former Belgian Prime Minister Guy Verhofstadt
Guy Verhofstadt
Guy Verhofstadt is a Belgian politician who was the 47th Prime Minister of Belgium from 1999 to 2008. He is currently a Member of the European Parliament and leader of the Group of the Alliance of Liberals and Democrats for Europe.- Early career :...
who saw the European Commission
European Commission
The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....
taking a leading role in a new economic government, something that would be opposed by the less integrationist states. Sarkozy's proposal was opposed by Eurogroup chair Jean-Claude Juncker who does not think Europe is ripe for such a large step and opposition from Germany killed off the proposal. Merkel approved of the idea of an economic government, but for the whole of the EU, not just the eurozone as doing so could split the EU and relegate non-eurozone states to second class members.
In his 2011 State of the Union address, Commission President
President of the European Commission
The President of the European Commission is the head of the European Commission ― the executive branch of the :European Union ― the most powerful officeholder in the EU. The President is responsible for allocating portfolios to members of the Commission and can reshuffle or dismiss them if needed...
José Manuel Barroso opposed the Franco-German intergovernmental plan, stating that community institutions should perform that role.
External links
- Eurogroup website, Council of the European Union