The euro crisis marked the start of the so-called ‘new European Union economic governance’. This new economic governance brings along different kinds of changes in the status of decision-making actors. Some of these changes involve power shifts, which can be categorised as either vertical or horizontal. Vertical power shifts transfer powers between different levels of government, usually from the national level to the European Union level. Horizontal power shifts transfer powers away from discretionary decision-making by governments to independent institutions. The new economic governance also implies a restriction in the discretionary decision-making power of governments by the imposition of policy rules. In this article, the accountability problems involved with these power shifts are analysed. It finds that, overall, the implementation process of the new economic governance has harmed accountability.

Points for practitioners

The key implication of this article is that the new governance arrangements made by the European Union to tackle the euro crisis are lacking in accountability and legitimacy. The moves towards more rules replacing policy discretion and towards entrusting policies to independent agencies rather than politically accountable governments are to the detriment of political accountability. Policy efficiency comes at a high price in terms of political acceptance as trust in the European Union is negatively influenced by the new governance system. Practitioners should keep this in mind when designing governance systems.