What would a European Finance Minister do?

The idea of a European Finance Minister (EU-FM) has made a comeback in the political discussion. In this paper, we sketch out in some detail what the tasks and accountability structure of such a minister could look like.

Mission: An EU-FM would act as a strong political authority safeguarding the economic and fiscal interests of the euro area as a whole, as opposed to the interests of individual member states.

Competences: The main competences of the EU-FM would be to (i) oversee the coordination of fiscal and economic policies, (ii) enforce rules in case of non-compliance, (iii) lead negotiations in a crisis context, (iv) contribute to buffering regional shocks and (v) represent the euro area in international institutions and fora.

Instruments: The EU-FM would manage a European investment budget to counter-balance asymmetric shocks and to reward reforms. She would also chair the European Monetary Fund, an improved version of the European Stability Mechanism.

Institutional ties: The EU-FM would be located at the interface of supranational and intergovernmental politics in the European Union. She would be ‘double-hatted’, being simultaneously a member of the Commission and President of the Eurogroup.

Democratic control: The European Council and the President of the Commission would jointly appoint the EU-FM and could force her resignation. In addition, a joint committee consisting of delegates from national parliaments and the European Parliament would scrutinise the minister’s spending on investment and exercise direct democratic control over the European Monetary Fund.