11. The institutions of Economic and Monetary Union:

2021 ◽  
pp. 251-275
Author(s):  
Dermot Hodson
Keyword(s):  
Economic Policy ◽  
Monetary Union ◽  
Euro Area ◽  
Explanatory Power ◽  
Economic And Monetary Union ◽  
Member States ◽  
Theoretical Perspectives ◽  
Political Cost ◽  
Key Dimensions ◽  
New Institutions

Since 1999, a subset of EU member states—known collectively as the euro area—has delegated exclusive competence for monetary policy to the European Central Bank (ECB), while giving limited powers to the European Commission, ECOFIN, and the Eurogroup in other areas of economic policy. The euro crisis provided the first major test of the Economic and Monetary Union (EMU), as a sovereign debt crisis spread between member states and threatened to tear the single currency apart. The ECB and two new institutions—the European Stability Mechanism and Euro Summit—helped to keep the euro area together but at significant economic and political cost. EU institutions were better prepared for the initial economic consequences of the COVID-19 pandemic, but the crisis still produced important institutional changes. The COVID-19 recovery fund Next Generation EU gives the Commission and Council a major new role in economic policy, albeit a temporary one for now. The EMU illustrates three key dimensions of EU institutional politics: the tension between intergovernmental versus supranational institutions, leaders versus followers, and legitimacy versus contestation. It also reveals the explanatory power of new institutionalism among other theoretical perspectives.

The Crisis-Induced Developments in the Economic and Monetary Union

2020 ◽  
pp. 18-65
Author(s):  
Menelaos Markakis
Keyword(s):  
Economic Integration ◽  
Monetary Union ◽  
Euro Area ◽  
Economic And Monetary Union ◽  
Member States ◽  
Legal Principle ◽  
Democratic Control ◽  
Economic Developments ◽  
Eu Economic Governance ◽  
The Eu

This chapter looks at the crisis-induced legal, institutional, and economic developments within the Economic and Monetary Union. It consists of two parts. First, there will be a brief sketch of the crisis-related developments. These include the setting-up of financial mechanisms, the European Central Bank’s interventions to combat the crisis, the enhanced oversight of national fiscal and economic policy, and the increased supervision over the financial sector. Second, there will be a ‘first assessment’ of their constitutional and structural implications. Two sets of issues will be examined here: issues of legal principle; and the bearing of the enacted measures on European economic integration. Three key arguments will be made in this chapter. First, it will be argued that the measures enacted have led to legislative fragmentation and have exacerbated problems of transparency and complexity which already existed in this area. Second, it will be shown that the chosen form of action has consequences for institutional balance in the EU, democratic control, and judicial review. Third, it will be argued that the enactment of measures which are only applicable to Euro area Member States has served to deepen economic integration within the Euro area and to further differentiate it from economic integration in non-Euro area Member States. Further, certain areas of the single market have integrated more deeply in the Euro area. It will be concluded that the various reforms which have been implemented have strengthened the EU economic governance framework from a legal, institutional, and economic perspective.

EU Institutions Representing Member States’ Governments

2020 ◽  
Author(s):  
Eugenia Dumitriu Segnana ◽  
Alberto de Gregorio Merino
Keyword(s):  
European Union ◽  
Monetary Union ◽  
Euro Area ◽  
Central Place ◽  
Common Interest ◽  
Economic And Monetary Union ◽  
The European Union ◽  
Member States ◽  
National Policies ◽  
Greek Crisis

The Council of the European Union (EU) occupies a central place in the Economic and Monetary Union (EMU), even more so than in any other Union policies. It exercises in this area a variety of roles going from a forum for coordination of national policies to legislative functions and executive powers. The different crises that affected the Union and in particular the euro area in the last ten years have strengthened its prominent position, in no small part due to the Council’s ownership by the Member States. Alongside the Council, the Euro Group, which is presided by a fixed-term president, has developed itself as the informal forum where Ministers from the Member States whose currency is the euro discuss matters of common interest. Its role has been decisive, in particular in the Cypriot and Greek crisis, which could have put into question the very existence of the euro area as a whole.

ERM II

2020 ◽  
Author(s):  
Ulla Neergaard
Keyword(s):  
Exchange Rate ◽  
Monetary Union ◽  
Euro Area ◽  
Economic And Monetary Union ◽  
Convergence Criteria ◽  
Member States ◽  
The Third ◽  
Exchange Rate Mechanism ◽  
Third Phase ◽  
Rate Mechanism

From the very beginning, an essential cornerstone of the Economic and Monetary Union (EMU) has been the European Exchange Rate Mechanism II (ERM II). It has been in force since 1 January 1999, ie from the initiation of the third phase of the EMU. Its overall purpose is to link currencies of Member States outside the euro area to the euro. Its importance lies in the fact that aspiring Member States must first join the mechanism for at least two years before being admitted as members of the euro area, as ERM II ‘membership’ is one of the four convergence criteria, which are required to be fulfilled for a Member State’s eventual adoption of the euro.

Conservative Liberalism in French and Italian Political Economy

2020 ◽  
pp. 308-349
Author(s):  
Kenneth Dyson
Keyword(s):  
Political Economy ◽  
Economic Policy ◽  
Monetary Union ◽  
Euro Area ◽  
Economic And Monetary Union ◽  
European Economic ◽  
Charles De Gaulle ◽  
Post War ◽  
Luigi Einaudi ◽  
De Gaulle

This chapter seeks to offer a balanced and nuanced view of conservative liberalism in French and Italian political economy by examining its key figures, the context of their work, what they thought and wrote, and how their thinking evolved. It also compares the significance of conservative liberalism in the discourses, policies, and politics of French and Italian political economy. In the case of France, the chapter examines the ideas and roles of Louis Rougier, Jacques Rueff, Maurice Allais, and Raymond Barre. It also discusses the Lippmann Colloquium in 1938; Rueff’s relations with Raymond Poincaré and Charles de Gaulle, especially in the period 1958–61; and the hard franc (franc fort) policy. The key texts of Rougier and Rueff are examined in detail. In the case of Italy, close attention is paid to the ideas and roles of Luigi Einaudi (including his connections to Wilhelm Röpke), Costantino Bresciani-Turroni, Luigi Sturzo, Guido Carli, and Francesco Forte; to the early post-war reconstruction; to Carli’s concept of the good and bad souls of Italy; and to external discipline (vincolo esterno) as a tool of economic policy. The chapter examines the stabilization traditions of France and Italy; the challenge posed by European economic and monetary union; and the deep hostility that emerged towards Ordo-liberalism in the wake of the euro area crisis after 2009.

scholarly journals Prospects for a Euro-Area Budget: An Analytical Outline

European View ◽  
2017 ◽  
Vol 16 (2) ◽  
pp. 211-218
Author(s):  
Siegfried Mureşan
Keyword(s):  
Moral Hazard ◽  
European Commission ◽  
Monetary Union ◽  
Euro Area ◽  
Economic And Monetary Union ◽  
Structural Reforms ◽  
Member States ◽  
Key Issues ◽  
The Creation

In a reflection paper intended to generate debate among euro-area governments, the European Commission has put forward ideas on what could be done to deepen the Economic and Monetary Union by 2025. One of the ideas outlined by the Commission is the creation of a euro-area budget. This article reviews the key issues that are relevant in the discussion on establishing such a budget; outlines the possible functions of such a budget, such as incentivising structural reforms or ensuring macro-stabilisation; and discusses the issues of size, funding, moral hazard and governance, while touching upon the role of non-euro-area member states. The article concludes with the assertion that the answer to this question is essentially political in nature and could constitute an example of how member states are ready to integrate further, while giving non-euro-area member states the opportunity to participate.

scholarly journals Dealing fairly with trade imbalances in monetary unions

2021 ◽  
Vol 20 (1) ◽  
pp. 45-66
Author(s):  
Marco Meyer
Keyword(s):  
Economic Policy ◽  
Monetary Union ◽  
Trade Deficit ◽  
Current Situation ◽  
Institutional Arrangements ◽  
Monetary Unions ◽  
Member States ◽  
Trade Imbalances ◽  
Theories Of Justice ◽  
The Impact

Politicians around the globe wrangle about how to deal with trade imbalances. In the Eurozone, members running a trade deficit accuse members running a surplus of forcing them into deficit. Yet political philosophers have largely overlooked issues of justice related to trade imbalances. I address three such issues. First, what, if anything, is wrong with trade imbalances? I argue that in monetary unions, trade imbalances can lead to domination between member states. Second, who should bear the burden of rebalancing trade? I argue that surplus and deficit countries should share that burden. The current situation placing the burden squarely on deficit countries is unjust. Third, which institutional arrangements should monetary unions adopt to regulate trade balances? Monetary unions can either reduce trade imbalances within the monetary union, neutralise the impact of trade imbalances on the economic sovereignty of member states, or delegate economic policy affecting trade balances to a legitimate supranational institution. The Eurozone must adopt one of these options to prevent member states from domination. Which option protects members best against domination depends on what makes interference between members arbitrary, an unresolved question in republican theories of justice.

scholarly journals The Fiscal Compact and the European Constitutions: ‘Europe Speaking German’

2012 ◽  
Vol 8 (1) ◽  
pp. 1-7 ◽  
Author(s):  
LB ◽  
JHR
Keyword(s):  
European Union ◽  
Czech Republic ◽  
Monetary Union ◽  
Euro Area ◽  
Economic And Monetary Union ◽  
Economic Policies ◽  
The European Union ◽  
The Czech Republic ◽  
The United Kingdom ◽  
Fiscal Compact

In between the writing of this editorial and the publication of this issue of EuConst, the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, in everyday parlance the ‘Fiscal Compact’, will have been signed by the representatives of the governments of the contracting parties — the member states of the European Union minus the United Kingdom and the Czech Republic. The Fiscal Compact is intended to foster budgetary discipline, to strengthen the coordination of economic policies and to improve the governance of the euro area.

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

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.

scholarly journals Risks of a slow-motion EMU reform

2019 ◽  
Vol 16 (2) ◽  
pp. 226-237
Author(s):  
László Andor
Keyword(s):  
European Union ◽  
Monetary Union ◽  
Euro Area ◽  
Slow Motion ◽  
Critical Assessment ◽  
Economic And Monetary Union ◽  
Reform Process ◽  
The European Union ◽  
Eurozone Crisis ◽  
Pros And Cons

The article provides a critical assessment of how the Economic and Monetary Union was designed, implemented and reformed in the European Union and discusses the risks of a slow-motion reform process. It is argued that the fact that the euro area economy has recovered in the last few years has become a source of complacency and delays. In particular, powerful forces continue to downplay the importance of systemic reconstruction and the risk of disintegration remains high despite the relative tranquillity of markets in the 2014–2018 period. Finally, the article evaluates competing paradigms about the eurozone crisis and the pros and cons of fiscal capacity building.

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