The EU’s current institutional framework does not allow for smooth European decisionmaking. Political life in Europe is still essentially domestic. Economic policies are created individually, and largely with national interests in mind. There are very few bodies that hold a eurozone-wide perspective, the European Central Bank being one of them. Unlike other institutions that coordinate policy among eurozone nations, the ECB is tasked with implementing a single monetary policy - one interest rate - for all of them. This forces it to look at the overall macro-economic and financial picture.

Many of the European Council’s decisions during the crisis, particularly those related to bailouts and financial assistance, required unanimity among the representatives of Member States. Yet each of those representatives answers to a national government, which, in turn, answers to a parliament. Each of those parliaments has a slightly different set of goals, procedures, and concerns.

There are three components to strengthening the EU’s capacity to make collective decisions: first, drop the requirements for unanimity for some cases; second, strengthen the rules that constrain national decisionmaking; and third, enforce all of the EU’s rules better.

Strengthening collective decision-making would require the EU to modify the rules of the European Financial Stability Facility, so that bailout decisions can be made by a qualified majority (as is the case in the IMF, for example) instead of a unanimity. This may not happen in the short run, but the risk of paralysis and worsening of the crisis might prompt some rethinking on the issue.

The second component - strengthening the rules to constrain national decisionmaking – is already underway. This year’s EU governance reform package includes proposals to streamline procedures for economic surveillance and allow for sanctions to kick in automatically whenever a eurozone country breaks the Stability and Growth Pact’s rules. But these plans do not go far enough. In particular, the Stability and Growth Pact, signed by all eurozone members to avoid excessive budget deficits, should be modified to ensure compliance among all countries.