EU policies

The Eiffel group: ‘A political community of the euro’

Agnès Benassy-Quéré, Shahin Vallee, 27 March 2014

The recent crisis has highlighted some problems in the current structure of the Eurozone, such as the lack of political integration. This column introduces the Eiffel group – a group of French experts – and its call for a ‘political community of the euro’. The economic and political rationales behind the proposal are discussed in detail. This proposal (also shared by experts in other countries) calls for a debate about the architecture and institutions underpinning the European Monetary Union.

The limits to partial banking unions

Octavia Foarta, 2 February 2014

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.

European merger policy reform

Tomaso Duso, Klaus Gugler, Florian Szücs, 26 January 2014

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.

Immigration from Romania and Bulgaria: The fiscal impact

Joakim Ruist, 18 January 2014

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.

First steps for banking union implementation

Silvia Merler, Guntram Wolff, 14 January 2014

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.

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