Book contents
- The Cambridge Handbook of European Monetary, Economic and Financial Integration
- The Cambridge Handbook of European Monetary, Economic and Financial Integration
- Copyright page
- Contents
- Contributors
- Introduction
- Part I The Economic and Monetary Union
- 1 Conceptual Foundations of Economic and Monetary Union
- 2 Theorizing Economic and Monetary Union
- 3 Monetary Union and the Single Currency
- 4 On the Misalignment of Monetary, Economic, and Political Integration in European Economic and Monetary Union
- 5 Ideas, Interests, and Power
- 6 Coping with Economic Crises through Learning by Doing
- 7 The Political Economy of Reinsurance
- 8 Euro Crises, the Productivity Slowdown, and the EMU
- Part II The Monetary Dimension
- Part III The Economic and Fiscal Dimensions
- Part IV Financial Integration
- Index
- References
6 - Coping with Economic Crises through Learning by Doing
An Evolving Policy Response
from Part I - The Economic and Monetary Union
Published online by Cambridge University Press: 28 September 2023
By
Book contents
- The Cambridge Handbook of European Monetary, Economic and Financial Integration
- The Cambridge Handbook of European Monetary, Economic and Financial Integration
- Copyright page
- Contents
- Contributors
- Introduction
- Part I The Economic and Monetary Union
- 1 Conceptual Foundations of Economic and Monetary Union
- 2 Theorizing Economic and Monetary Union
- 3 Monetary Union and the Single Currency
- 4 On the Misalignment of Monetary, Economic, and Political Integration in European Economic and Monetary Union
- 5 Ideas, Interests, and Power
- 6 Coping with Economic Crises through Learning by Doing
- 7 The Political Economy of Reinsurance
- 8 Euro Crises, the Productivity Slowdown, and the EMU
- Part II The Monetary Dimension
- Part III The Economic and Fiscal Dimensions
- Part IV Financial Integration
- Index
- References
Summary
The series of crises after 2007 exposed shortcomings in the design of Economic and Monetary Union (EMU) in Europe and the difficulty of arriving at solutions. This chapter traces the evolving policy responses to these crises and asks whether they go far enough to underpin the future sustainability and resilience of the eurozone. It examines the background to the problems EMU encountered, then contrasts the policy responses to the sovereign debt crisis of the early 2010s with those enacted to deal with the economic consequences of COVID-19. Although the extent of governance reform in the EU and, specifically, the eurozone is prone to be under-estimated, more needs to be done. The chapter identifies and analyses several remaining gaps in the governance framework, focusing on three areas: the future of EU fiscal rules, the need for and likely nature of a supranational fiscal capacity, and the consequences of economic divergence among eurozone members. It concludes that despite some consensus on what needs to be done, decisive action is needed to strengthen the governance of the eurozone, failing which, the future resilience of the euro cannot be taken for granted. The challenges are as much political as technical.
- Type
- Chapter
- Information
- Publisher: Cambridge University PressPrint publication year: 2023
References
Alogoskoufis, G., and Featherstone, K. (eds.) (2021). Greece and the Euro: From Crisis to Recovery. London: LSE Hellenic Observatory.Google Scholar
Angeloni, I. (2020). Beyond the Pandemic: Reviving Europe’s Banking Union. London: CEPR Press. https://voxeu.org/content/beyond-pandemic-reviving-europe-s-banking-unionGoogle Scholar
Angeloni, I. (2021) Three ways to fix European banking union. 3 September. www.omfif.org/2021/09/three-ways-to-fix-european-banking-union/Google Scholar
Bachtler, J., Begg, I., Charles, D., and Polverari, L. (2016). EU Cohesion Policy in Practice: What Does It Achieve? London: Rowman and Littlefield International.Google Scholar
Barre, R. (1969). Memorandum on Community action in the monetary field 12 February. Brussels: European Commission.Google Scholar
Beetsma, R. M. W. J., and Debrun, X. (2016). Fiscal councils: rationale and effectiveness. IMF Working Paper WP No. 16/86. Washington, DC: International Monetary Fund.Google Scholar
Beetsma, R. M. W. J., and Debrun, X. (eds.) (2018). Independent Fiscal Councils: Watchdogs or Lapdogs? VoxEU.org e-book. London: CEPR Press.Google Scholar
Begg, I. (2017). Fiscal and other rules in EU economic governance: Helpful, largely irrelevant or unenforceable. National Institute Economic Review 239, R3–13.Google Scholar
Begg, I. (2023) Completing a Genuine Economic and Monetary Union. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Bénassy-Quéré, A., Brunnermeier, M. K., Enderlein, H., Farhi, E., Fratzscher, M., Fuest, C., Gourinchas, P.-O., Martin, P., Pisani-Ferry, J., Rey, H., Schnabel, I., Véron, N., Weder di Mauro, B., and Zettelmeyer, J. (2018). Reconciling risk sharing with market discipline: A constructive approach to euro area reform. CEPR Policy Insight No. 91. London: Centre for Economic Policy Research.Google Scholar
Blanchard, O., Leandro, A., and Zettlemeyer, J. (2021). Redesigning EU fiscal rules: From rules to standards. PIIE Working Paper No. 21-1. Washington, DC: Peterson Institute for International Economics.Google Scholar
Blyth, M. M. (2013). Austerity: The History of a Dangerous Idea. Oxford: Oxford University Press.Google Scholar
Brunnermeier, M. K., James, H., and Landau, J-P. (2016). The Euro and the Battle of Ideas. Princeton, NJ: Princeton University Press.Google Scholar
Darvas, Z., and Leandro, A. (2015). The limitations of policy coordination in the euro area under the European semester. Bruegel Policy Contribution No 2015/19, Policy Contribution. www.bruegel.orgGoogle Scholar
De Grauwe, P. (2020). Economics of Monetary Union, 13th ed. Oxford: Oxford University Press.Google Scholar
De Larosière, J. [Chairman] (2009). The High-Level Group on Financial Supervision in the EU: Report. Brussels, 25 February.Google Scholar
Delors, J. (1989). Report on economic and monetary union in the European Community. Brussels, 17 April. http://aei.pitt.edu/1007/1/monetary_delors.pdfGoogle Scholar
Dyson, K., and Featherstone, K. (1999). The Road to Maastricht: Negotiating Economic and Monetary Union. Oxford: Oxford University Press.Google Scholar
European Commission (1977). Report of the Study Group on the Role of Public Finance in European Integration. Luxembourg: OOPEC.Google Scholar
European Commission (2015). Towards the completion of the Banking Union COM(2015) 587. Strasbourg, 24 November. http://aei.pitt.edu/1007/1/monetary_delors.pdfGoogle Scholar
European Commission (2017). Reflection paper on the deepening of the economic and monetary union. Brussels, 31 May. Reflection paper on the deepening of the economic and monetary union.Google Scholar
European Commission (2019). Vade mecum on the Stability and Growth Pact. Institutional Paper No. 101. Brussels: European Commission.Google Scholar
European Commission (2020). Economic governance review. COM(2020) 55, Brussels, 5 February. http://aei.pitt.edu/1007/1/monetary_delors.pdf.Google Scholar
European Commission (2021). The EU economy after COVID-19: Implications for economic governance. COM(2021) 662, Brussels. 19 October. https://ec.europa.eu/info/sites/default/files/economy-finance/economic_governance_review-communication.pdf.Google Scholar
European Commission (2022a). Cohesion in Europe towards 2050: Eighth Report on Economic, Social and Territorial Cohesion. Luxembourg: Publications Office of the European Union.Google Scholar
European Commission (2022b). ‘Communication on orientations for a reform of the EU economic governance framework’ COM (2022) 583, Brussels, 11.09.2022 https://economy.Google Scholar
European Council (2012). Towards a genuine economic and monetary union: report by President of the European Council, Herman van Rompuy. EUCO120/12, Brussels, 26 June.Google Scholar
Follesdal, A., and Hix, S. (2006). Why there is a democratic deficit in the EU: A response to Majone and Moravcsik. Journal of Common Market Studies 44(3), 533–562.Google Scholar
Fujita, M., Krugman, P., and Venables, A. J. (1999). The Spatial Economy: Cities, Regions and International Trade. Cambridge, MA: MIT Press.Google Scholar
Gros, D. (2015). Completing the Banking Union: Deposit insurance. CEPS Policy Brief No. 335, Brussels: CEPS, Download CEPS Publication.Google Scholar
Gros, D., and Corti, F. (2021). Fiscal rules in a post-Covid brave new world: No need to sprint. Policy Insights No. 2021-14. Brussels: CEPS. www.ceps.eu/download/publication/?id=34388&pdf=PI2021-14_Fiscal-rules-in-a-post-Covid-brave-new-world.pdf.Google Scholar
Hamilton, A. (1790). First report on the public credit. Communicated to the House of Representatives, 14 January. Treasury Department. https://archive.schillerinstitute.com/economy/2015/hamilton-first_report_on_the_public_credit.pdf.Google Scholar
Issing, O. (2006). The euro – a currency without a state. Speech by at an event organized by the Bank of Finland, Helsinki, 24 March.Google Scholar
Issing, O. (2021). An assessment of the ECB’s strategy review. Central Banking XXXII(1), n.p.Google Scholar
Juncker, J.-C., with Tusk, D., Dijsselbloem, J., Draghi, M., and Schulz, M. (2015). Completing Europe’s economic and monetary Union. European Commission, Brussels. 02.06.2015.Google Scholar
Lord, C. (2017). How can parliaments contribute to the legitimacy of the European Semester? Parliamentary Affairs 70, 673–690.Google Scholar
McNamara, K. R. (1998). The Currency of Ideas: Monetary Politics in the European Union. Ithaca, NY: Cornell University Press.Google Scholar
Moravcsik, A. (2002). Reassessing legitimacy in the European Union. Journal of Common Market Studies, 40(4), 603–624.Google Scholar
Pisani-Ferry, J. (2014). The Euro Crisis and Its Aftermath. Oxford: Oxford University PressGoogle Scholar
Rehn, O. (2020). Walking the Highwire: Rebalancing the European Economy in Crisis. Basingstoke: Palgrave Macmillan.Google Scholar
Schmidt, V. A. (2020). Europe’s Crisis of Legitimacy: Governing by Rules and Ruling by Numbers in the Eurozone. Oxford: Oxford University Press.Google Scholar
Thygesen, N., Beetsma, R., Bordignon, M., Debrun, X., Szczurek, M., Larch, M., Busse, M., Gabrijelcic, M., Jankovics, L., and Malzubris, J. (2021). The EU fiscal framework: A flanking reform is more preferable than quick fixes. Voxeu. https://voxeu.org/article/eu-fiscal-framework-case-reform.Google Scholar
Von der Leyen, U. (2019). A Union that strives for more: My agenda for Europe. Political guidelines for the next European Commission, 2019–2024.Google Scholar
Weiler, J. (2013). In the face of crisis: Input legitimacy, output legitimacy and the political messianism of European integration. Journal of European Integration 34(7), 825–841.Google Scholar
Werner, P. (1970). Report to the Council and Commission on the realisation by stages of economic and monetary union in the Community. Supplement to Bulletin 11-1970 of the European Communities.Google Scholar