15 Jul The Eurogroup must be dissolved – Agenda Pública

The Eurogroup should be abolished from the European Union’s institutional architecture. No compelling rationale remains for preserving an institution that has been rendered anachronistic by European integration’s own trajectory. The euro’s triumph and the financial integration it has fostered, though still incomplete, have stripped the Eurogroup of its raison d’être. Today, ECOFIN —the EU Council configuration for economic and financial affairs— constitutes the legitimate forum for member state representation and deliberation, whilst co-legislating with the European Parliament’s Committee on Economic and Monetary Affairs. There is no justification for further complicating the Union’s already labyrinthine institutional arrangements. The Eurogroup has outlived its purpose.

The Eurogroup emerged formally in 1998, following European Council endorsement the previous year, as an informal caucus for finance ministers from member states transitioning to the euro. The single currency remained theoretical, and we possessed no semblance of a harmonised financial regulatory framework. Nevertheless, it was evident that the euro’s advent would necessitate unprecedented strides in European integration, demanding substantive convergence in banking, insurance and capital markets regulation, alongside fiscal and tax policy coordination. A dedicated forum for prospective eurozone members to address these matters appeared entirely rational.

Furthermore, the successive enlargements of 2004, 2007 and 2013, where accession did not automatically entail euro adoption, lent credence to the Eurogroup’s existence, given that a significant cohort of member states remained outside the currency area. Following the 2004 enlargement to twenty-five members, merely twelve had adopted the euro. However, the institutional landscape has undergone a fundamental transformation.

Bulgaria’s accession to the eurozone on 1 January 2026 will leave only six EU member states outside the single currency: Czechia, Sweden, Hungary, Poland, Romania, and Denmark. Consequently, twenty-one of the Union’s twenty-seven members will denominate exclusively in euros. Moreover, save for Denmark’s negotiated opt-out, the remaining five are treaty-bound to eventual adoption, as the EU Treaties unambiguously stipulate. This reality prompts a fundamental question: why maintain a parallel structure to ECOFIN when all executive and legislative decisions require endorsement from the member states’ sole institutional representative body—ECOFIN itself?

The post-2008 financial crisis response saw the Union construct a comprehensive banking union anchored to the euro, featuring unified supervision, a single resolution mechanism and a mutualised resolution fund for crisis management. Banking regulation has achieved remarkable integration, as has the broader supervisory architecture encompassing capital markets and insurance. These advances materialised through ECOFIN’s negotiations with Parliament. Whilst further integration of savings and investment markets remains imperative, such progress scarcely requires an institution like the Eurogroup, which has metamorphosed from facilitator to impediment. Its intergovernmental procedure, divorced from the Community method, now obstructs progress, hostage to consensus-building that gravitates towards the lowest common denominator, structurally incapable of delivering the ambition our circumstances demand.

Crucially, no other Community policy exhibiting pronounced asymmetric effects across member states has warranted a comparable institutional arrangement. Migration governance proceeds without exclusive councils of frontier states. The Common Fisheries Policy operates without segregated maritime caucuses. Support for ultraperipheral regions or mountainous territories functions without restricted intergovernmental configurations. Even Schengen—that most sovereignty-sensitive arrangement, excluding certain members whilst incorporating non-EU states—operates without supplementary institutional machinery beyond the Justice and Home Affairs Council.

The European project has internalised the principle that such policies, among myriad others, implicate the Union collectively and must therefore be negotiated inclusively—through member state representatives in the appropriate Council configurations (ECOFIN for economic affairs) and citizens’ representatives in the European Parliament.

Writing in 2021 in ‘Volver a las raíces’ (Clave Intelectual), I argued: «The Eurogroup undermines the Community institution’s capacity to formulate economic and financial policy through ECOFIN, whilst evading transparent accountability. As non-euro members converge rapidly towards adoption, the Eurogroup should dissolve into ECOFIN proper». The candidacy of Spain’s Economy Minister Carlos Cuerpo for the Eurogroup presidency represented a final opportunity to revitalise this moribund institution, atrophied by the euro’s success, the effective ECOFIN-Parliament legislative partnership, and the Eurogroup’s structural inability to transcend intergovernmental paralysis. The verdict is now inescapable: the Eurogroup’s dissolution represents the optimal institutional reform.

Substantial work remains on economic integration between the eurozone and the Union, now virtually coterminous, yet the Eurogroup has evolved into an institutional impediment requiring removal.