Policy Coordination in a Monetary Union

Policy coordination in one form or another has been a feature of EU governance for the past two decades. Developing initially as a mechanism through which to coordinate national economic policies in the shadow of economic and monetary union (EMU), and extending to the coordination of employment policies through the European Employment Strategy, by the 2000s, policy coordination was being heralded as a new form of governance to be deployed to achieve the aims of the Lisbon Strategy of economic and social reform. Indeed, such was the interest in this new form of EU governance, it even acquired its own distinctive nomenclature—the ‘open method of coordination’ (OMC).

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History of an Incomplete EMU

The EU Law of Economic and Monetary Union ◽

10.1093/oso/9780198793748.003.0003 ◽

2020 ◽

Author(s):

Emmanuel Mourlon-Druol

Keyword(s):

Monetary Union ◽

Banking Regulation ◽

Maastricht Treaty ◽

Policy Coordination ◽

Economic And Monetary Union ◽

Monetary Unions ◽

Single Currency ◽

Financial Transfers ◽

History Of ◽

Banking Regulation And Supervision

The Economic and Monetary Union (EMU) created in 1992 by the Maastricht Treaty was famously incomplete. The decision to create a European single currency was taken without agreeing at the same time on the introduction of traditional accompanying features of some other monetary unions, namely: substantial financial transfers from richer to less developed regions, a credible framework for macroeconomic policy coordination, and European-wide provisions for banking regulation and supervision, to name but a few. The 1992 Maastricht Treaty set out an unfinished, or ‘lopsided union’, with the predominance of monetary union over economic union. The titles of the multiple reports published since 1992, such as the Van Rompuy report of 2012, ‘Towards a Genuine Economic and Monetary Union’, the Five Presidents’ Report of 2015, ‘Completing Europe’s Economic and Monetary Union’, and the Commission’s ‘Reflection Paper on the Deepening of the Economic and Monetary Union’ of 2017 highlight this lopsidedness very well.

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7. Policy-Making under Economic and Monetary Union Crisis, Change, and Continuity

10.1093/hepl/9780199689675.003.0007 ◽

2017 ◽

Author(s):

Dermot Hodson

Keyword(s):

Monetary Union ◽

Euro Area ◽

Sovereign Debt ◽

Policy Making ◽

De Novo ◽

Debt Crisis ◽

Policy Coordination ◽

Financial Supervision ◽

Economic And Monetary Union ◽

High Stakes

This chapter examines the role of the economic and monetary union (EMU) in the European Union’s macroeconomic policy-making. As of 2015, nineteen members of the euro area have exchanged national currencies for the euro and delegated responsibility for monetary policy and financial supervision to the European Central Bank (ECB). EMU is a high-stakes experiment in new modes of EU policy-making insofar as the governance of the euro area relies on alternatives to the traditional Community method, including policy coordination, intensive transgovernmentalism, and delegation to de novo bodies. The chapter first provides an overview of the origins of the EMU before discussing the launch of the single currency and the sovereign debt crisis. It also considers variations on the Community method, taking into account the ECB and the European Stability Mechanism.

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Gcc Monetary Union and the Degree of Macroeconomic Policy Coordination

IMF Working Papers ◽

10.5089/9781451868128.001 ◽

2007 ◽

Vol 07 (249) ◽

pp. 1 ◽

Cited By ~ 7

Author(s):

Bassem Kamar ◽

Samy Ben Naceur ◽

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Keyword(s):

Monetary Union ◽

Macroeconomic Policy ◽

Policy Coordination

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The Stability Pact: Safeguarding the Credibility of the European Central Bank

National Institute Economic Review ◽

10.1177/002795019816300110 ◽

1998 ◽

Vol 163 ◽

pp. 87-98 ◽

Cited By ~ 36

Author(s):

Michael Artis ◽

Bernhard Winkler

Keyword(s):

Central Bank ◽

Monetary Union ◽

European Monetary Union ◽

European Central Bank ◽

Policy Coordination ◽

European Monetary ◽

Fiscal Discipline ◽

European Central ◽

Stability Pact ◽

The Stability

The ‘Stability Pact’ agreed at the Dublin Summit in December 1996 and concluded at the Amsterdam European Council in June 1997 prescribes sanctions for countries that breach the Maastricht deficit ceiling in stage three of European Monetary Union. This paper explores the central provisions and possible motivations of the Stability Pact as an incentive device for fiscal discipline and as a partial substitute for policy coordination and a common 'stability culture’.

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Monetary integration in crisis: how well do existing theories explain the predicament of EMU?

Transfer European Review of Labour and Research ◽

10.1177/1024258912469345 ◽

2013 ◽

Vol 19 (1) ◽

pp. 37-48 ◽

Cited By ~ 9

Author(s):

Waltraud Schelkle

Keyword(s):

Collective Action ◽

Crisis Management ◽

Monetary Union ◽

Euro Area ◽

Policy Coordination ◽

Critical Assessment ◽

Monetary Integration ◽

Macroeconomic Policies ◽

Currency Area ◽

Collective Action Problems

Three theories or rationales can be invoked to explain the formation of the monetary union as well as its policy architecture. One sees its rationale as forming an optimal currency area, another as making macroeconomic policies credibly stability-oriented and a last one as overcoming collective action problems of mutually beneficial policy coordination. Each theory also implies an explanation for why the euro area is in crisis now. The article contains a critical assessment of these theories, with a view to how they have informed crisis management of the euro area but have also failed so far to stabilize the monetary union effectively.

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