scholarly journals Euro Crisis and the EMU Institutional Reforms

Equilibrium ◽  
2013 ◽  
Vol 8 (1) ◽  
pp. 7-31 ◽  
Author(s):  
Jarosław Kundera
Keyword(s):  
Euro Area ◽  
Debt Crisis ◽  
Essential Element ◽  
Monetary Integration ◽  
Banking Union ◽  
Fiscal Policies ◽  
Euro Crisis ◽  
Institutional Reforms ◽  
Political Union ◽  
The Eu

The main goal of this article is to find the answer for the question about the necessary reform to be undertaken in the EU to save the euro as a common currency. The author envisages three scenarios of the euro area’s future development. In his opinion, the most probable one are the institutional reforms in the euro area. The essential element of the reform is to establish a proper mix between the ECB’ monetary policy and fiscal policies in the member states. All proposed steps against the euro crisis are mutually correlated: monetary integration requires stricter fiscal integration, fiscal integration requires banking union, but banking union is going to require some form of a political union. This way the debt crisis in the euro area may present an opportunity to renew the strength of the European institutions.

scholarly journals Post-communist countries of the EU and the euro: Dynamic linkages between exchange rates

2017 ◽  
Vol 67 (4) ◽  
pp. 511-538 ◽  
Author(s):  
Nikolaos Stoupos ◽  
Apostolos Kiohos
Keyword(s):  
Czech Republic ◽  
Exchange Rates ◽  
Euro Area ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
Monetary Integration ◽  
The Czech Republic ◽  
The Impact ◽  
The Eu ◽  
Dynamic Linkages

The sovereign debt crisis of 2010 in the euro area significantly decelerated the monetary integration of the EU. The main purpose of this paper is to explore whether five post-communist member states of the EU are mature enough to adopt the euro. We used nominal exchange rates in the error correction model with asymmetric power ARCH (ECM-APARCH). Our results highlight that EU membership positively increased the impact of the euro on the currency of each of these countries in the short-run. In contrast, the long-term effect of the euro on each currency is negative for the Czech Republic, Hungary, and Croatia. Wholly different results were obtained for Poland and Romania. The APARCH model showed that the negative responses of the euro had a greater or neutral effect on the conditional variance of each currency instead of the positive responses. The debt crisis of the euro area had no impact on the dynamic linkages between the currencies. Our research concludes that Croatia, the Czech Republic, and Hungary are not ready to join the euro area in the near future. On the other hand, the currencies of Poland and Romania are already aligned with the fluctuations of the euro.

Recommendations

2020 ◽  
pp. 303-330
Author(s):  
Menelaos Markakis
Keyword(s):  
Euro Area ◽  
Technical Assistance ◽  
Fiscal Rules ◽  
Banking Union ◽  
Euro Crisis ◽  
Member States ◽  
Capital Markets Union ◽  
The Eu ◽  
Transparency And Accountability

This chapter draws together the implications of the Euro crisis for the EU and its Member States and critically evaluates the shortcomings of the Treaty schema in terms of transparency and accountability. The discussion begins with the measures intended to ‘complete’ and ‘deepen’ the Economic and Monetary Union (EMU). It sets out the author’s own view regarding the key reforms that would be necessary, albeit one that is informed by the proposals made by the EU institutions. These include a reform of the EU fiscal rules; the provision of technical assistance to Member States implementing structural reforms; establishing a Euro area stabilization function; completing the Banking Union and making progress towards a Capital Markets Union; and strengthening the role of EU financial watchdogs. This chapter further puts forward a number of concrete proposals on how to bolster transparency and accountability in the area of EMU, the dividing line being between those proposals that could be implemented without a Treaty amendment and those reforms that would require a Treaty revision. It further addresses separately accountability (and transparency) in the Banking Union, as well as the role of EU courts in the EMU.

scholarly journals Enhanced Economic Governance in the EU: Alternative to a Political Union?

2014 ◽  
Vol 37 (1) ◽  
pp. 10-35 ◽  
Author(s):  
Elżbieta Kawecka-Wyrzykowska
Keyword(s):  
Debt Crisis ◽  
Point Of View ◽  
List Type ◽  
Economic Governance ◽  
Political Union ◽  
Political Will ◽  
Member States ◽  
Eu Member States ◽  
Realistic Approach ◽  
The Eu

Abstract In reaction to the sharp deterioration of fiscal positions and a sovereign debt crisis in the majority of EU member states, EU leaders have been strengthening the EU economic governance framework, in particular for the eurozone member states. This has been reflected mainly through a reinforcement of the Stability and Growth Pact (SGP) within the so-called six-pack and through the recent adoption of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (TSCG). The objective of this paper is to present the main decisions taken to address intensifying problems in the EU and assess them from the point of view of stability of the eurozone. The paper argues that the recent adoption of the six-pack and of the TSCG has created a legal basis for more effective governance structure that is much stronger than previously, and closer fscal coordination among EU member states in order to ensure public fnance sustainability. The practical results will depend, however, on the political willingness of countries to accept the new rules and rigorous enforcement of those rules. Most of the new solutions continue the previous approach: stricter preventive and punishing rules, and their more rigorous application. TSCG has adopted a new element: parallel to EU rules, there should be enhanced national rules (possibly in the form of constitutional commitments) and national institutions responsible for fscal discipline. This approach implies that international rules are not strong enough for sovereign countries, which agree to be subject to democratically elected national authorities but do not want to follow decisions by “outside” institutions. In addition, reverse voting in the Council encourages for more pragmatic, economically justifed use of the modifed SGP. In view of a lack of political will to move forward into a political union, this seems the only realistic approach to ensure fscal stabilization and keep the eurozone alive in the short and medium run. Two main research methods have been applied: (a)Statistical analysis of data on changes of the public fnances in the EU member states (budgetary defcit and public debt), (b)comparative analysis of successive EU documents on strengthening economic governance and identifcation of strong and weak aspects of the new documents from the point of view of stability of the eurozone. The main conclusion is that in a situation of a lack of political will to move forward into a political union, the only realistic approach to ensure fscal stabilization and keep the eurozone alive in the short and medium term seems to be to enforce rigorously the recently adopted new commitments aiming at better fscal control of euro area members.

scholarly journals Multilevel cooperation in the EU resolution of cross-border bank groups: lessons from the non-euro area Member States joining the Single Resolution Mechanism (SRM)

2021 ◽  
Author(s):  
Agnieszka Smoleńska
Keyword(s):  
Euro Area ◽  
Banking Union ◽  
Member States ◽  
Essential Condition ◽  
European Banking Union ◽  
Cross Border ◽  
Single Resolution Mechanism ◽  
European Banking ◽  
Administrative Oversight ◽  
The Eu

AbstractCross-border banking presents a unique set of challenges in the EU from the perspective of arranging administrative oversight structures. Structuring cooperation between different EU and national authorities in a way which is conducive to trust-building and mutual engagement is an essential condition for overcoming disintegrative tendencies in the internal market. To assess how the existing EU arrangements fare in this regard in the context of EU resolution law, this article comparatively analyses the different models of multilevel administrative cooperation in the post-crisis EU framework. These are specifically the centralised model of the European Banking Union (Single Resolution Mechanism) and the relatively looser networked model of the resolution colleges. The multilevel cooperation under both models is nuanced given the distinct roles of the national resolution authorities, EU agencies and the differentiated status of non-euro area Member States in the EBU (Croatia, Bulgaria). The article’s findings allow to identify specific problems of constitutional nature pertaining to the accountability of administrative cooperation, equality of Member States and the implications of Meroni doctrine’s distortive effects.

The building of economic governance in the European Union

2013 ◽  
Vol 19 (1) ◽  
pp. 23-35 ◽  
Author(s):  
Amy Verdun
Keyword(s):  
Sovereign Debt ◽  
Debt Crisis ◽  
Social Dimension ◽  
Monetary Integration ◽  
Economic Governance ◽  
The European Union ◽  
The Past ◽  
The Social ◽  
Shed Light ◽  
The Eu

This article seeks to shed light on the development over the past decades of the concept of economic governance. It asks what is understood by economic governance and what role the social dimension has played. The article offers an analysis of the problems and possible issues confronting the EU as it seeks ways to address the sovereign debt crisis by embarking on deeper economic integration. The article concludes that from the early days there have been questions about the exact interaction between economic and monetary integration and thus between ‘economic’ and ‘monetary’ union. Despite Delors’ original inclination, few were willing to establish any linkage between EMU and social matters. The crises have again brought out the need to consider the two in tandem. Moreover, with the increased role in economic governance accorded to EU-level institutions, there is a need to rethink the EU democratic model.

The opportunity for euro-area reform is closing

2019 ◽  
Keyword(s):  
Euro Area ◽  
Deposit Insurance ◽  
Insurance Coverage ◽  
Burden Sharing ◽  
Banking Union ◽  
Governance Reform ◽  
Content Type ◽  
European Banking Union ◽  
European Banking ◽  
The Eu

Subject Euro-area governance. Significance In the EU, macroeconomic governance reform is focusing around the creation of a euro-area budget and a European Deposit Insurance Scheme (EDIS) -- the final pillar for the completion of the European Banking Union (EBU) which would provide stronger insurance coverage for member states. However, northern countries are reluctant to pay for crisis-prone ones in the south, so compromise on detail could take years while the initiatives will have limited scope in responding to crises. Impacts The ECB’s Single Supervisory Mechanism will continue to focus on ‘risk reduction’ measures, including the disposal of non-performing loans. The EU is unlikely to give Italian budget concessions perceived as acceptable by Rome, possibly hardening the position of Italy’s populists. If Manfred Weber’s candidacy to become European Commission president fails, Berlin will likely insist that it gets the ECB president post. The rise of migration flows in the Mediterranean and the lack of EU resolution on burden-sharing will worsen north-south relations.

scholarly journals State Contingent Debt as Insurance for Euro Area Sovereigns

2019 ◽  
Vol 5 (1) ◽  
pp. 64-90
Author(s):  
Maria Demertzis ◽  
Stavros A Zenios
Keyword(s):  
Risk Reduction ◽  
Euro Area ◽  
Risk Sharing ◽  
Banking Union ◽  
European Monetary ◽  
Institutional Reforms ◽  
Eu Member States ◽  
Safety Regulations ◽  
Banking Institutions ◽  
European Monetary Fund

Abstract The authors provide a novel angle to the ongoing discussions by the G20 on sovereign contingent debt and argue that contingent debt could provide market-based insurance to protect the euro area from future debt crises. Risk-sharing with the markets is a practical way forward in the context of the Franco-German debate on risk-sharing among EU member states vs system-wide risk reduction. The financial innovation of contingent debt is a feasible euro area reform that would not introduce risk-sharing between states or require institutional reforms or Treaty changes. However, coordination would be needed. The authors’ suggestion fills a gap in the proposals on the completion of the banking union and the possible establishment of a European Monetary Fund (EMF). These proposals offer institutions-based solutions to crises, with the banking union providing safety regulations that will make banking institutions more resilient, while the EMF will be a ‘fire brigade’ to be called on in emergencies. What has not been tapped are the markets, whose tolerant behaviour to sovereign demands encouraged the build up of debt, while their finicky response exacerbated the crisis.

18. Economic and Monetary Union

2020 ◽  
pp. 583-611
Author(s):  
Alicia Hinarejos
Keyword(s):  
Monetary Union ◽  
Economic And Monetary Union ◽  
Banking Union ◽  
Current Debate ◽  
Euro Crisis ◽  
The Future ◽  
Set Up ◽  
The Eu

This chapter explains how the Economic and Monetary Union (EMU) was set up and the flaws within the system. It gives a brief overview of the euro crisis and its relationship to, and consequences for, EMU. Finally, it looks to the current debate on the future of EMU and the EU, including the development of an EU banking union.

scholarly journals Comparison Between Bulgaria and Croatia in their Road Towards ERM II and The Banking Union of the EU

2021 ◽  
Vol 61 (5) ◽  
pp. 263-276
Keyword(s):  
Member State ◽  
Euro Area ◽  
The Other ◽  
Banking Union ◽  
Single Currency ◽  
Other Hand ◽  
Close Cooperation ◽  
The Eu

The last ERM II accession before July 2020 was in 2005. After the establishment of the Banking Union of the EU, starting from 2014, there was no enlargement of ERM II by EU Member State that is outside the Euro area. Therefore, the accession on 10 July 2020 of Bulgaria and Croatia to the ERM II on one hand and to the Banking Union on the other hand through the mechanism of the so-called close cooperation with the ECB represents a particular interest. The participation in these two mechanisms is a precondition for the accession to the Euro area and the adoption of the single currency. The comparison between the two countries shows that their path to the ERM II and the Banking Union is quite similar. However, there are also few peculiarities.

Integration at What Price? The Erosion of National Democracy in the Euro Periphery

2017 ◽  
Vol 52 (2) ◽  
pp. 266-294 ◽  
Author(s):  
Matthias Matthijs
Keyword(s):  
Crisis Response ◽  
Democratic Politics ◽  
Monetary Integration ◽  
Euro Crisis ◽  
Democratic Institutions ◽  
Trade Off ◽  
The Core ◽  
Democratic Principles ◽  
Policy Solutions ◽  
The Eu

The euro crisis brought back a widening gap in prosperity between the eurozone’s core and periphery members, but also revealed a divergence in the strength of its national democracies. This article examines the amplified tension between progressively uprooted national markets governed by a supranational technocracy and nationally organized democratic politics in the eurozone’s periphery. Building on Dani Rodrik’s globalization ‘trilemma’, this article explains the weakening of national democratic institutions in Greece, Ireland, Portugal, Spain and Italy since 2008. While the periphery states were forced to choose monetary integration at the expense of both democracy and sovereignty, this trade-off was mostly absent in the core. The eurozone’s policy solutions to the crisis did not allow for any democratic input, were implemented through opaque and often-undemocratic throughput processes, and resulted in deteriorating output. The article concludes that the EU crisis response made euro membership in the periphery less compatible with national democratic principles.

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