The sovereign debt and banking crises of 2010-12 have led to significant changes in the institutions of the Eurozone. The credibility of common policies regarding budgetary discipline and economic convergence remains weak. This chapter proposes that the way forward is to gradually bring common economic policies under the oversight of the European Parliament and to strengthen the role of the Commission. The picture must be completed with getting national parliaments more involved in the European policy process. The present state of the Eurozone could be seen as a sort of political equilibrium, likely to be economically unstable.
Stefano Micossi, Monday, September 7, 2015 - 00:00
Margherita Comola, Marcel Fafchamps, Tuesday, November 4, 2014 - 00:00
Mathias Hoffmann, Bent E. Sørensen, Friday, November 9, 2012 - 00:00
How do members of existing monetary unions share risk? Drawing on a decade of research, this column argues that fiscal transfers in fact make a limited contribution to economic coherence. In the context of Europe’s current crisis, the evidence suggests that unfinished capital market integration must be completed if we wish to see adequate and effective risk sharing.
Sebnem Kalemli-Ozcan, Bent E. Sørensen, Wednesday, May 23, 2012 - 00:00
News reports today are full of negative stories on the Eurozone. This column presents evidence of a much-overlooked benefit. The common currency has led to increased financial integration and in turn increased risk sharing, which helps to significantly reduce output shocks. Those arguing for a break up of the Eurozone should take note.
Torben M. Andersen, Monday, September 27, 2010 - 00:00
Springing from the debate over the Danish flexicurity system, the author of CEPR DP8025 outlines a model in which incentive effects of tax-financed unemployment benefits are balanced by direct and indirect insurance benefits. Such benefits may increase labour market flexibility by making job searches less risky for workers.
Robert Flood, Akito Matsumoto, Nancy P. Marion, Tuesday, January 12, 2010 - 00:00
Financial globalisation makes it easier for individuals to trade financial assets, and that should help them diversify against country-specific risks. But empirical support for improved international risk sharing is limited. This column says that there is evidence of improved international risk sharing, and it comes mostly from the convergence in rates of consumption growth among countries.