EU institutions

Enrico Spolaore, 25 July 2015

The idea that Europe’s challenges could be addressed with further integration dates back to the beginning of the European project. This column argues that partial integration might not necessarily lead to more integration. In particular, such a strategy might not be successful in areas involving high heterogeneity costs that do not necessarily reduce with more integration. If further integration is to take place, European institutions may need to accept much more flexibility and have provisions not only for entry, but also for exit.

Stefano Micossi, 17 July 2015

The ECB’s monetary policy has evolved rapidly over the past decade – from the adoption of the euro to the recent implementation of quantitative easing. This column discusses the effectiveness of the ECB’s policies. The single currency induced pro-cyclicality in the Eurozone periphery. The failure to adequately respond to the Lehman failure placed the burden to stabilise financial markets in the Eurozone onto the ECB, which as a consequence has become the lender of last resort in Eurozone sovereign debt markets. And finally, the persistent deflation and depression convinced the ECB to adopt an expansionary monetary stance.

Paolo Buccirossi, Catarina Marvão, Giancarlo Spagnolo, 14 July 2015

EU anti-cartel decisions have imposed billion of euros of fines in recent years, but private actions by cartel victims are also possible. This column discusses a 2014 EU Directive that facilitates private actions by cartel victims while attempting to reduce conflicts between private and public enforcement.

Dae Woong Kang, Ashoka Mody, 13 July 2015

In 1997, Milton Friedman warned that when politics clashes with economics, the outcome is not a pretty one. This column reviews some of criticisms and weaknesses of the European macroeconomic system, taking a historic look at the decades leading up to the creation of the euro. The clash Friedman warned about is manifest now in Greece. The economic logic for dealing with Greece is clear, but politics continue to defy economics.

Nauro F. Campos, Fabrizio Coricelli, Luigi Moretti, 19 June 2015

The imminence of the British referendum lays the European integration project at a crossroads. One tabled policy proposal is to offer different membership options – shallow integration (economic only) and deep integration (economic and political). This column presents new evidence comparing these two options. Focusing on Norway, a country that is economically but not politically associated with the EU, deep integration is estimated to bring a 6% productivity gain in the first five years, compared with shallow integration. These findings bring new economic arguments to debates about EU integration and membership.

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