Towards a common external representation for the eurozone ?

This Policy Paper is a contribution of  Daniela Schwarzer (SWP), Federico Steinberg (Elcano) and Diego Valiante (CEPS), to the project Think Global – Act European (TGAE). Thinking strategically about the EU’s external action directed by Notre Europe – Jacques Delors Institute (report available in May 2013, dir. Elvire Fabry, Senior Research Fellow, Notre Europe – Jacques Delors Institute).

Daniela Schwarzer, Head of Research Division EU Integration, SWP, Federico Steinberg, Senior Analyst for Economy and International Trade, Real Instituto Elcano and Diego Valiante, Research Fellow, CEPS ? Since the introduction of the euro in 1999, the external representation of the eurozone has been incrementally developed, but no formal amendments have been made. This contribution discusses the case for a consolidated representation of the eurozone in international economic fora, analyses the obstacles to achieving it, and puts forward proposals to solve some of the existing obstacles. It argues that there is a strong case for creating a single voice for the euro in the world in general and in the IMF in particular, especially after the global financial crisis and the emergence of the G20 as the main forum for global economic governance. However, some eurozone countries are unwilling to give up sovereignty and transfer more power to Brussels. In addition, the functioning of the IMF, which is based on high majority voting, may induce major euro area countries not to give up their individual influence over IMF decisions. Nevertheless, the recently created European Stability Mechanism could act as a catalyst for solving some of these problems.