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Europe's New Fiscal Union pp 73–101Cite as

Palgrave Macmillan

Building Central Financial Assistance Capacities

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Abstract

In May 2010 European leaders agreed on the creation of a € 500 bn mechanism to provide assistance to euro area countries facing financial stability risks. The establishment of the European Financial Stability Facility (EFSF), later turned into the European Stability Mechanism (ESM), was a critical juncture in the constitution of a European fiscal centre. Its financial capacity is unprecedented. The mechanisms’ lending power amounts to more than three times the size of the annual EU budget. This chapter retraces the negotiation that led to the creation of these mechanisms and of the smaller and often forgotten facilities that preceded their existence. The chapter argues that the creation of these financial mechanisms has converted the Eurogroup and the Euro Working Group (EWG) into executive bodies.

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Notes

  1. 1.

    Interviewee 50 – European Stability Mechanism official.

  2. 2.

    Interviewee 4 – European Commission official.

  3. 3.

    Financial provision to non-euro area members was already a fact of life in the EU since 2002 through the Balance of Payments Facility (BoP).

  4. 4.

    Interviewee 38 – European Central Bank official.

  5. 5.

    Interviewee 4 – European Commission official.

  6. 6.

    Interviewee 38 – European Central Bank official.

  7. 7.

    Interviewee 38 – European Central Bank official.

  8. 8.

    The Guardian, 11 April 2010.

  9. 9.

    Interviewee 12 – European Commission official.

  10. 10.

    Ibid.

  11. 11.

    http://ec.europa.eu/economy_finance/eu_borrower/efsm/index_en.htm

  12. 12.

    Interviewee 27 – Finnish Ministry of Finance official.

  13. 13.

    Interviewee 12 – European Commission official.

  14. 14.

    Interviewee 4 – European Commission official.

  15. 15.

    Interviewee 9 – EU Council official.

  16. 16.

    Interviewee 49 – European Stability Mechanism official.

  17. 17.

    Financial Times, 9 February 2012, ‘Germany and Europe: A very federal formula’.

  18. 18.

    EWG Chairman.

  19. 19.

    German Interior Minister, representing German Finance Minister Wolfgang Schäuble who was ill upon arrival in Brussels and unable to negotiate for Germany.

  20. 20.

    Interviewee 1 – EU Council official.

  21. 21.

    Interviewee 4 – European Commission official.

  22. 22.

    Yet it retained a key administrative role in terms of preparing the Memorandum of Understanding and monitoring the compliance of ‘conditionality’.

  23. 23.

    Financial Times, 12 May 2010, ‘Paris seen as trumping Berlin at the EU table’.

  24. 24.

    Ibid.

  25. 25.

    Interviewee 27 – Finnish Ministry of Finance official.

  26. 26.

    Interviewee 1 – EU Council official.

  27. 27.

    The EFC president and the EWG president are the same persons.

  28. 28.

    Questions & Answers section of the EFSF website, consulted on 31 January 2016.

  29. 29.

    Financial Times, 27 September 2010, ‘Eurozone Needs a permanent bail-out fund’, by Peter Bofinger, Henrik Enderlein, Tommaso Padoa-Schioppa and André Sapir.

  30. 30.

    Interviewee 34 – European Central Bank official.

  31. 31.

    Interviewee 34 – European Central Bank official.

  32. 32.

    Interviewee 34 – European Central Bank official.

  33. 33.

    Interviewee 27 – Finnish Ministry of Finance official.

  34. 34.

    Interviewee 50 – European Stability Mechanism official.

  35. 35.

    Interviewee 4 – European Commission official.

  36. 36.

    Interviewee 27 – Finnish Ministry of Finance official.

  37. 37.

    Interviewee 43 – European Central Bank official.

  38. 38.

    Interviewee 43 – European Central Bank official.

  39. 39.

    Interviewee 32 – European Central Bank official.

  40. 40.

    Interviewee 40 – EU Council official.

  41. 41.

    Interviewee 1 – EU Council official.

  42. 42.

    Interviewee 12 – European Commission official.

  43. 43.

    Interviewee 40 – EU Council official.

  44. 44.

    Interviewee 43 – European Central Bank official.

  45. 45.

    Interviewee 50 – European Stability Mechanism official.

  46. 46.

    Interviewee 40 – EU Council official.

  47. 47.

    Interviewee 40 – EU Council official.

  48. 48.

    https://www.consilium.europa.eu/media/21468/eurogroup-wp-ii-2016.pdf

  49. 49.

    Also called at times ‘Eurogroup Working Group’.

  50. 50.

    In truth the Eurogroup disposes of two secretariats, one located in the Council’s Secretariat General and another one located in the Commission’s DG ECFIN.

  51. 51.

    Interviewee 43 – European Central Bank official.

  52. 52.

    Interviewee 18 – Italian Ministry of Finance official.

  53. 53.

    Interviewee 18 – Italian Ministry of Finance official.

  54. 54.

    Interviewee 10 – EU Council official.

  55. 55.

    Interviewee 18 – Italian Ministry of Finance official.

  56. 56.

    Interviewee 18 – Italian Ministry of Finance official.

  57. 57.

    Interviewee 22 – Italian Ministry of Finance official.

  58. 58.

    Interviewee 27 – Finnish Ministry of Finance official.

  59. 59.

    Interviewee 10 – EU Council official.

  60. 60.

    Interviewee 20 – Independent analyst.

  61. 61.

    Interviewee 1 – EU Council official.

  62. 62.

    Interviewee 13 – European Parliament official.

  63. 63.

    Interviewee 10 – EU Council official.

  64. 64.

    Interviewee 10 – EU Council official.

  65. 65.

    Interviewee 40 – EU Council official.

  66. 66.

    Interviewee 18 – Italian Ministry of Finance official.

  67. 67.

    Interviewee 22 – Italian Ministry of Finance official.

  68. 68.

    Interviewee 22 – Italian Ministry of Finance official.

  69. 69.

    Interviewee 18 – Italian Ministry of Finance official.

  70. 70.

    Interviewee 22 – Italian Ministry of Finance official.

  71. 71.

    Interviewee 32 – European Central Bank official.

  72. 72.

    Interviewee 30 – Finnish Ministry of Finance official.

  73. 73.

    Interviewee 32 – European Central Bank official.

  74. 74.

    Interviewee 22 – Italian Ministry of Finance official.

  75. 75.

    Interviewee 22 – Italian Ministry of Finance official.

  76. 76.

    Interviewee 18 – Italian Ministry of Finance official.

  77. 77.

    Interviewee 50 – European Stability Mechanism official.

  78. 78.

    Interviewee 10 – EU Council official.

  79. 79.

    Interviewee 22 – Italian Ministry of Finance official.

  80. 80.

    Interviewee 12 – European Commission official.

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Authors and Affiliations

  1. European University Institute, Florence, Italy

    Pierre Schlosser

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Schlosser, P. (2019). Building Central Financial Assistance Capacities. In: Europe's New Fiscal Union. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-98636-4_4

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