As argued in an earlier commentary, the financial crisis exposed important economic inconsistencies in the way that EMU operated.1 Although progress has been made, the reality is that more needs to be done.
Delivering the Eurozone ‘Consistent Trinity’
Marco Buti, Maria Demertzis, João Nogueira Martins, 30 March 2014
Topics: Europe's nations and regions, Macroeconomic policy
Tags: banking union, debt, EMU, euro, eurozone, Eurozone crisis, fiscal consolidation, fiscal policy, imbalances, internal devaluation, Stability and Growth Pact, structural reforms
Europe’s new fiscal compact treaty does not outlaw Keynesianism and is a stepping stone to more progress
Jacob Funk Kirkegaard, 6 February 2012
In record time since the idea was first mulled over at the EU Council on 9 December 2011, Europe has compiled a new Fiscal Compact Treaty.1 Angela Merkel on the night of its final approval on 30 January called it a “masterpiece”. It is perhaps unsurprising, though, that not everyone agrees.
A crisis mechanism for the euro
Giancarlo Corsetti, John Hassler, Gilles Saint-Paul, Hans-Werner Sinn, Jan-Egbert Sturm, Xavier Vives, Michael P. Devereux, 11 March 2011
When the fathers of the euro devised the common currency, they endowed it with a set of rules to buttress its credentials as a new global hard currency. According to the so-called Stability and Growth Pact, no member country was henceforth allowed to have budget deficits exceeding 3% of GDP, nor have public debt above 60% of GDP.
Saving jobs or saving institutions?
Tito Boeri, 16 December 2010
The package on economic governance to be discussed by the European Council on 16 December acknowledges the dangers associated with external imbalances as well as fiscal imbalances. It also provides rules for public debt (rather than simply deficit) reduction. Both innovations mark a significant improvement with respect to the defunct fiscal rules for the Eurozone.
Fixing the flaws in the Eurozone
Stanley W Black, 23 November 2010
What is happening to the Eurozone? Are the troubles of the high-inflation countries (Greece, Ireland, Portugal, and Spain) due to excessive government borrowing that should have been reined in by the Stability and Growth Pact? Is the solution to be found in more stringent enforcement of the excessive deficit procedures?
Stronger EU economic governance: A response to the critics
Marco Buti, Martin Larch, 25 October 2010
Severe crises trigger reforms, and reforms trigger controversy. The ongoing reform of EU economic governance is no different. It comes as an inevitable and necessary consequence of the worst financial and economic dislocations Europe has witnessed in decades. The legitimate and most pertinent question is: Has the Commission found the right answers?
The European Commission’s proposals: Empty and useless
Francesco Giavazzi, Luigi Spaventa, 14 October 2010
Debts and deficits have always occupied centre stage of the European economic policy debate – the implicit assumption being that fiscal discipline is the relevant condition for the stability of the Union.
The Commission proposals for stronger EU economic governance: A comprehensive response to the lessons of the Great Recession
Marco Buti, Martin Larch, 14 October 2010
On 29 September, the European Commission adopted a comprehensive set of proposals to reform and to broaden EU economic governance. The reform package is the most recent step in a much broader effort to incorporate the lessons of the crisis in the EU policy framework, to prevent economic instabilities and, ultimately, to protect workers and taxpayers.
Stability and Growth Pact: Counterproductive proposals
Paolo Manasse, 7 October 2010
The global crisis has laid bare the inadequacy of the European surveillance procedures. Enshrined in the Stability and Growth Pact, the idea was to prevent fiscal ill-discipline, the explosion of domestic and foreign debt, trade imbalances, as well as competitiveness gaps in the Eurozone. It didn’t work. On 29 July the European Commission adopted an ambitious reform of the pact.
Why a tougher Stability and Growth Pact is a bad idea
Paul De Grauwe, 4 October 2010
The European Commission has presented its proposals to strengthen the Stability and Growth Pact (SGP). If accepted by the Council, this will be the third version since the start of the Eurozone.
- A tale of two depressions: What do the new data tell us? February 2010 updateEichengreen, O’Rourke
- 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
- Debt, deleveraging, and the liquidity trap: A new modelKrugman
Cadot, de Melo, 16 June 2014