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This chapter discusses the European Union’s (EU) response to the euro crisis that emerged in late 2009, two years after the global financial crisis struck. It identifies the challenges this crisis has posed to the existing institutional set-up of economic and monetary union (EMU) and shows that it had a lasting impact on dicussions over the EU’s future well beyond its most dramatic moments. A timeline of the euro crisis is provided and the main changes to the institutional framework of European economic governance at the time of writing are reviewed. The chapter considers whether the crisis was caused by a deficit of centralized decision-making and whether it has served, in turn, as a catalyst for deeper economic and political integration in the euro area and the Union more generally. The consequences of the crisis for the EU’s legitimacy are also explored from competing theoretical perspectives.

This chapter examines the role of the economic and monetary union (EMU) in the European Union’s macroeconomic policy-making. As of 2015, nineteen members of the euro area have exchanged national currencies for the euro and delegated responsibility for monetary policy and financial supervision to the European Central Bank (ECB). EMU is a high-stakes experiment in new modes of EU policy-making insofar as the governance of the euro area relies on alternatives to the traditional Community method, including policy coordination, intensive transgovernmentalism, and delegation to de novo bodies. The chapter first provides an overview of the origins of the EMU before discussing the launch of the single currency, the sovereign debt crisis, and economic responses to Covid-19. It also considers variations on the Community method, taking into account the ECB and the European Stability Mechanism.