The European Policy Mix: Law and Order

Abstract

The euro area triggered the launch of a yet-unheard-of economic policy architecture. Unlike a US-style monetary union, Europeans decided they did not need the federal financial clout that would allow them to carry out an effective redistribution policy between member states on a vast ‘European’ scale. With an upward limit of 1.4 per cent of European GDP, the Community’s budget does not allow — far from it, in fact — for far-reaching policies. Torn as it is between the Common Agricultural Policy (CAP) and structural funds, it finds it hard to make its mark on either agricultural revival or the realignment of poorer regions.