Abstract
Although the European Union (EU) is supposed to ensure the prosperity of its members, several member states have been going through a serious economic and social crisis. The organization of economic policies in the euro area is certainly far from optimal. Far-reaching institutional reforms are needed in order to meet a number of key aims: boost economic development, improve upward convergence, and increase stability. There is certainly no shortage of individual proposals on the table. It is helpful to group the proposals into two fundamental views, which have a contrasting philosophy and endorse quite different tools. The first view focuses on the compliance with agreed rules and places faith in market discipline to incentivize improved competitiveness and reduced public indebtedness. The second view highlights the requirements of solidarity and coordination between the EU Member States. While both views have their pros and cons, the ongoing process of reforms has left the euro area with minimal proposals by the Commission that do not clearly decide which of these two views would be the preferred one.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
Maybe it was best expressed in his speech in Aachen in May 2018: “Europe (…) can no longer function on successive hegemonies. It can only be built on constant solidarity”.
- 2.
See W. Schäuble’s Non-paper for paving the way towards a Stability Union, available at http://media2.corriere.it/corriere/pdf/2017/non-paper.pdf.
- 3.
Seigniorage income reflects the interests that the central bank earns on the money it lends to banks or the return it receives on the assets it purchases.
References
Aparisi de Lannoy, L., and X. Ragot. 2017. Une (ré) assurance chômage européenne. OFCE Policy Brief 28, November 30.
Beer, C., W. Köhler-Töglhofer, and A. Stiglbauer. 2014. A Common European Unemployment Insurance – A Much Debated Route Toward European Fiscal Union. Monetary Policy & the Economy 4: 35–52.
Bénassy-Quéré, A., M. Brunnermeier, H. Enderlein, E. Farhi, M. Fratzscher, C. Fuest, P.-O. Gourinchas, P. Martin, J. Pisani-Ferry, H. Rey, I. Schnabel, N. Véron, B. Weder di Mauro, and J. Zettelmeyer. 2018. Reconciling Risk Sharing with Market Discipline: A Constructive Approach to Euro Area Reform. CEPR Policy Insight No. 91.
Brunnermeier, M.K., L. Garicano, P.R. Lane, M. Pagano, R. Reis, T. Santos, and D. Vayanos. 2016. The Sovereign-Bank Diabolic Loop and ESBies. American Economic Review 106 (5): 508–512.
Corsetti, G., L. Feld, P.R. Lane, L. Reichlin, D. Vayanos, H. Rey, and B. Weder di Mauro. 2015. A New Start for the Eurozone: Dealing with Debt. London: CEPR Press.
Corsetti, G., L. Dedola, M. Jarociński, B. Mackowiak, C. Allard, J. Bluedorn, and B. Weder di Mauro. 2017. Business Cycle Stabilisation in the Eurozone: Ways Forward. VoxEU, November 15.
Creel, J. 2018a. Le Fonds Monétaire Européen: un instrument plus politique qu’économique. Revue de l’euro 52.
———. 2018b. Convergence in EMU: What and How? In-Depth Analysis, ECON, European Parliament, May.
De Grauwe, P. 2012. The Governance of a Fragile Eurozone. Australian Economic Review 45 (3): 255–268.
Delpla, J., and J. von Weizsäcker. 2010. Bruegel Policy Brief No. 2010/03, Brussels.
Dullien, S. 2007. Improving Economic Stability: What the Euro Area Can Learn from the United States’ Unemployment Insurance. Working Paper Stiftung Wissenschaft and Politik FG 1, 2007/11.
Manassé, P., and D. Katsikas. 2018. Economic Crisis and Structural Reforms in Southern Europe. Routledge Studies in the European Economy. London: Routledge.
Marjolin, R., F. Bobba, H. Bosman, G. Brouwers, L. Camu, B. Clappier, I. Foighel, F. Forte, H. Giersch, P. Lynch, D. MacDougall, H. Markmann, F. Peeters, A. Shonfield, and N. Thysegen. 1975. Report of the Study Group ‘Economic and Monetary Union 1980’. Brussels: European Commission.
Pâris, P., and C. Wyplosz. 2014. PADRE: Politically Acceptable Debt Restructuring in the Eurozone. Geneva Reports on the World Economy, Geneva/London.
Sandbu, M. 2018. Make Do and Mend in the EU. Financial Times – Free Lunch, February 5.
Sinn, H.-W. 2014. Austerity, Growth and Inflation: Remarks on the Eurozone’s Unresolved Competitiveness Problem. World Economics 37 (1): 1–13.
Wyplosz, C. 2017. A European Monetary Fund? Paper requested by the European Parliament, PE 602.076, IPOL, EGOV.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2018 The Author(s)
About this chapter
Cite this chapter
Creel, J., Saraceno, F. (2018). The Future of the Euro Area: The Possible Reforms. In: Creel, J., Laurent, É., Le Cacheux, J. (eds) Report on the State of the European Union. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-98364-6_8
Download citation
DOI: https://doi.org/10.1007/978-3-319-98364-6_8
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-319-98363-9
Online ISBN: 978-3-319-98364-6
eBook Packages: Economics and FinanceEconomics and Finance (R0)