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Governing the EMU after the crisis: sense and nonsense in the new management instruments of the Euro-zone

Managing the crisis of the Eurozone, triggered by the spillover of the global financial meltdown has brought about more supranationalism than anybody would have guessed against the backdrop of the Lisbon Treaty of 2009. While the latter is firmly anchored in inter-governmentalism, crisis management has yielded giant steps toward decisions made by non-elected bodies in intransparent manners. Creating the permanent crisis-management mechanism of 705 by euros,ESM, vesting the ECB with the non-trivial fiscal function of supervising systemically relevant large private banks, creating the SRM and the European semester all follow the 'money for discipline' logic. Furthermore the ECB has re-interpreted its mandate. With the unlimited liquidity provision since September, 2012 and the 1.17 bn stimulus package of January, 2015 the bank has become a proper federal central bank. Being a lender of last resort and taking quasi-fiscal responsibilities the bank has become a major policy-maker-without similar accountability.

While parallel fiscal and monetary easing have not resulted in robust growth, the disciplinary devices of EMU have fallen short of deterring notorious trespassers, like Italy and France. By contrast, successfully adjusting small economies,like Luxemburg and Latvia have shown the primacy of committment/domestic ownership of reforms against any supra-national straightjacket. This calls for re-thinking the up until now prevailing politico-bureaucratic logic of EMU reforms.