Banking union is a vital project for the future of the Eurozone. Under the current proposal, bank supervision will be centralised but national authorities will remain responsible for recapitalising troubled banks. This leaves the system susceptible to domestic political economy constraints. This column argues that such a system can fail to be welfare improving. The inefficiencies can be mitigated, however, if the banking union is accompanied by greater electoral accountability and fiscal rules that constrain debt accumulation by national governments.
In 2004, European merger law was substantially revised, with the aim of achieving a ‘more economic approach’ to merger policy. This column discusses a recent empirical assessment of European merger cases before and after the reform. Post-reform, the outcomes of merger cases became more predictable, and the Commission prohibited fewer pro-competitive mergers. While there remains room for improvement in several aspects, the reform seems to have been successful in bringing European competition law closer to economic principles.
The lifting of transitional access restrictions for Romanian and Bulgarian workers is a hotly debated topic in the EU with big implications for public finances in destination countries. This column presents analysis of immigrants in Sweden, which never imposed access restrictions when these two countries joined the EU. Romanian and Bulgarian migrants to Sweden under this unrestricted regime make a sizeable positive contribution to Swedish public finances. Contributions can be expected to be even larger in the UK and Ireland.
The European Banking Union matures in 2014, with the ECB assuming its role as single supervisor. This column outlines the transition to the new steady state. This will involve a comprehensive balance sheet assessment, new rules regarding recapitalisation, restructuring, and resolution, and the determination of how recapitalisation costs are distributed across taxpayers in different European nations.
Other Recent Articles:
- Carbon pricing and the role of natural gas in EU climate policy
- Do European fines deter price fixing?
- A banking union for the Eurozone
- European data protection: Impact of the EU data-protection regulation
- Will bank supervision in Ohio and Austria be similar? A transatlantic view of the Single Supervisory Mechanism
- Basel III: Europe’s interest is to comply
- Winners of a European banking union
- A blueprint for macroprudential policy in the banking union
- Macroprudential supervision in banking union
- Banking reform: Do we know what has to be done?
- Banking union: If Ireland were Nevada
- Banking union and ambiguity: Dare to go further
- Slow but steady? External adjustment within the Eurozone starts working
- From the internal market to a banking union: A proposal by the German Council of Economic Experts
- Hedging macroeconomic risk in the Eurozone: Fiscal union versus capital markets
- The Eurozone breakup debate: Uncertainty still reigns
- Can the EU mobilise resources for peace in its neighbourhood?
- Should the EU suspend its airline emissions charge?
- Outright Monetary Transactions sterilised?
- Banking union for Europe - risks and challenges
- Internationalisation, innovation, and productivity of firmsAltomonte, Aquilante, Békés, Ottaviano
- Predicting economic turning pointsAhir, Loungani
- How rich nations benefit from EU membershipCampos, Coricelli, Moretti
- The ECB should do QE via forex interventionFrankel
- The chartbook of economic inequalityAtkinson, Morelli
- A tale of two depressions: What do the new data tell us? February 2010 updateEichengreen, O’Rourke
- The ECB’s stealth bailoutSinn
- Educated in America: College graduates and high school dropoutsHeckman, LaFontaine
- Eurozone breakup would trigger the mother of all financial crisesEichengreen
- Panic-driven austerity in the Eurozone and its implicationsDe Grauwe, Ji
Claessens, 18 April 2014
Campos, Coricelli, Moretti
Ostry, Berg, Tsangarides