Existential crisis, incremental response: the eurozone's dual institutional evolution 2007–2011

We use an institutionalist approach to understand how the governance of the eurozone has evolved in the wake of the multiple crises that erupted since 2007. We assess the impact of the crisis on the institutional development of EMU in light of three case studies: the role of the ECB during the crisis; the reform of the economic governance framework; the set-up of euro area financial assistance arrangements. Paradoxically, even when faced with an existential crisis, EMU continues to evolve through gradual change. Empirical evidence points to the existence of a dual process of change – layering and redirection.