Governing by Rules and Ruling by Numbers in the Eurozone Crisis

Chapter 4 provides an overview of the Eurozone crisis, to serve as a background for the subsequent four chapters which discuss in turn each of the four EU actors’ particular pathways to legitimacy, including their sources of power and grounds for throughput legitimacy, along with the Janus-faced public perceptions of their Eurozone governance. The chapter begins with a brief review of the history of European Monetary Union (EMU), describing the trials and tribulations in the run-up to the Maastricht Treaty and member states’ very different ideas and discourse related to monetary integration, as illustrated by the differences in German, French, and Italian views. It then considers what happened at the time of the introduction of the single currency. The chapter follows with the initial responses to the Eurozone crisis during its fast-burning phase, characterized by a doubling down on the rules of the Stability and Growth Pact. It elaborates on the trials and tribulations at the inception of the crisis, on EU actors’ initial actions and reactions, and on institutional innovations such as banking union. It also provides further details on legislation and treaty agreements, as well as on the ideas underpinning the policy responses. The chapter ends by considering the benefits and drawbacks of EU actors’ subsequent reinterpretation of the rules by stealth during the Eurozone crisis’ slow-burning phase, arguing that although rules reinterpretation may have improved policy responses (output), not admitting this raised questions of accountability and transparency (throughput), while failing to address problems of political legitimacy (input).