Assessing the Impact of the Eurozone on National Economic Sovereignty

Abstract

Eurozone membership entails ceding national monetary authority to the European Central Bank (ECB) and accepting supranational fiscal rules (e.g. the Maastricht criteria, Stability and Growth Pact (SGP), and Fiscal Compact). This paper examines how these arrangements have constrained member states’ economic sovereignty since the 2008 crisis. Method: Using a comparative case study of four Eurozone countries (Greece, Italy, Germany, France), we analyse official data and policy developments from 2008 onward. Theoretical lenses include the economic policy “trilemma” (impossible trinity), economic interdependence, and neofunctionalist spillover. Results: We find that Euro membership has systematically curtailed unilateral monetary policy (no devaluation, uniform ECB rates) and imposed tight fiscal limits (3% deficit, 60% debt). During the sovereign‐debt crisis, bailout conditionality and ECB interventions (e.g. OMT, QE) further eroded autonomy. Sovereignty was shared or pooled in many areas of economic policy (e.g. coordinated budget review, banking supervision). However, differences emerged: Germany and France enjoyed policy space earlier on, while Greece and Italy bore stricter external control (Troika programmes, market pressure) and deeper recessions. Conclusions: Eurozone membership has unquestionably limited national fiscal and monetary discretion, validating concerns about constrained sovereignty. Yet institutions have adapted (strengthened fiscal governance, banking union) and there are proposals for further reforms (fiscal union, central stabilization funds) to reconcile stability with democratic control. Within the existing Euro-area framework, states strive for adaptive strategies (structural reforms, fiscal buffers, and coordinated policy) to mitigate sovereignty loss.