EU Governance in Crisis

The Euro Crisis is no longer just a crisis of the euro, but one of governance as well. With the woes of the 2010 euro crisis extending into 2012, the crisis has revealed the weaknesses of the European Union (EU) and its institutions. In a recent essay the Swedish economist and writer Frederik Erixon, described the current Eurozone crisis as a “crisis of the sovereign,” meaning that politics in the EU are in crisis. EU institutions have lost their legitimacy and authority in dealing with the current crisis, thereby further contributing to the severity of the problems the EU is facing. This essay examines the political dimension of the 2010 Euro Crisis to draw conclusions about the impact the euro crisis has on EU politics. In doing so the essay looks at the creation of the European Financial Stability Facility and the recent discussions to integrate fiscal policy within the EU to distil the lack of effective EU leadership in solving the crisis. Rather than pooling sovereignty from the outset, EU member states were, and to some extent still are, in constant disagreement over how to respond to the crisis. For domestic political reasons, member states pursue their own interests as opposed to that of the EU as a whole, leading to conclude that the EU’s institutions and governing structures are weaker than one would hope.