In Europe we trust: selecting and empowering EU institutions in disruptive circumstances

ABSTRACT

Over the past decade, the European Union (EU) made significant strides in economic and fiscal policy integration without formal treaty-based changes. After the euro crisis, member states granted the European Central Bank banking supervisory powers. During the pandemic, they entrusted the European Commission with raising EU debt through NextGenerationEurope. This article examines the empowerment of supranational institutions as a deliberate ajustment to disruptive circumstances. By so doing, it demonstrates that empowerment can happen through legislative acts and joint decisions by member states. The study reveals that when states have multiple agent options, like in the banking union, they select the institution they trust the most. Conversely, in nested delegation games, extensive monitoring and reporting requirements, as in the case of NextGenerationEurope, are aimed at avoiding the defection of single member states, what we call ”principal slack”, at the implementation stage.

KEYWORDS:

• European Commission
• European central bank
• empowerment
• delegation
• COVID-19 pandemic

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. The interviews were conducted with EU officials from the Commission – including DG Economic and Financial Affairs, Budget, and the Recovery and Resilience Task Force – at the ECB’s representative office in Brussels with members from the Budget and Economic and Monetary Affairs Committees of the European Parliament. We also interviewed civil servants at the General Secretariat of the Council, Economic and Financial Committee, Economic and Financial Affairs Council, Council’s Legal Service, and Cabinet of the Presidency of the European Council. Other interviewees include civil servants from the permanent representations of some member states in Brussels, including heads of units, directors, assistants to Directors-General, EP Rapporteurs and Shadow Rapporteurs, policy officers, MEP assistants, and legal advisors. For the ECB case study, we conducted interviews in March, November, and December 2016 and in February and July 2017. For the Commission delegation case, we conducted interviews in July, September, and October 2021. All interview partners agreed to talk with us anonymously without disclosure of their names or job positions. The interview material was transcribed using the MAXQDA software for the qualitative data analysis.

2. We thank Reviewer 2 for encouraging us to add more extensive evidence to strengthen our argument on the empowerment of the Commission in terms of the delegation of power and transfer of financial resources.

Additional information

Funding

This work has received generous support from the Technical University of Munich, Institute for Advanced Study.