Past Event

Bruegel – Financial Times Forum: The future of euro-area governance

The third event in the Bruegel - Financial Times Forum series looked into the future of euro-area governance.

Date: February 27, 2018, 12:30 pm Topic: European Macroeconomics & Governance

video & audio recordings


At this event, we used Slido to conduct polls. 

What are the missing pieces of the euro-area architecture? How to go beyond the current visions of euro-area governance?
How should the new European Monetary Fund work, in order to break the sovereign-bank link? What are the broader strategic implications for Europe’s position in the world?

Manfred Weber, Guntram Wolff and Gideon Rachman explored the next steps needed to create a more functional and coherent economic governance framework. This event was moderated by Maria Demertzis.

Summary

With improved economic conditions in the EA as well as increased trust in the common currency, the debate not only focused on subdued reforms, but also on a potential new status quo for the EA. However, with awareness that more reforms are needed, there exist both temporary as well as structural obstacles that impede further progress.

Potential objectives and visions for the EA …

  • Complete banking union – the European Deposit Insurance Scheme and a common backstop for the Single Resolution Fund are still outstanding
  • Redefine priorities in budget – identify areas in which EA/EU can contribute most and channel resources towards them e.g. migration, macroeconomic stabilization
  • Improve risk sharing – instruments such as mutual or contingent debt or a budget line that supports the EA economy during downswings are crucial pillars in other monetary unions
  • Safeguard democracy – strengthen the role of European Parliament to guarantee independent institutions
  • Reduce asymmetries – e.g. fiscal rules determine maximum deficit, but allow for discretion on the upside

… and obstacles to achieve them

Temporary

  • National elections – e.g. political German gridlock hampered progress in reforms
  • Lost momentum – Brexit, changing dynamics in the USA, improved economic conditions side-line EA reforms

Structural

  • Mistrust – across nations as well as between nations and EU institutions manifest diverging visions
  • Sovereignty – opposed to the development of other federations, European nations have well developed government functions which leaves less roles for EU and therefore, reluctance to transfer sovereignty
  • Unanimity condition – finding a progressive compromise based on unanimous agreement impedes major reforms

Event notes by David Pichler, Research Assistant.

This event was jointly organised with the Financial Times, one of the world’s leading business news organisations, recognised internationally for its authority, integrity and accuracy.

Schedule

Feb 27, 2018

12:30-13:00

Check in and lunch

13:00-14:00

Panel discussion

Chair: Maria Demertzis, Deputy Director

Gideon Rachman, Chief Foreign Affairs Commentator, Financial Times

Manfred Weber, Chair of the EPP Group, European Parliament

Guntram B. Wolff, Director

14:00-14:30

Q&A

14:30

End

Speakers

Maria Demertzis

Deputy Director

Gideon Rachman

Chief Foreign Affairs Commentator, Financial Times

Manfred Weber

Chair of the EPP Group, European Parliament

Guntram B. Wolff

Director

Location & Contact

Bruegel, Rue de la Charité 33, 1210 Brussels

Matilda Sevon

matilda.sevon@bruegel.org

Read article More on this topic More by this author

Opinion

Can Eurozone Reform Help Contain Trump?

The Trump administration knows that a key source of US economic leverage is the dollar’s role as the world’s dominant reserve currency. Countering America’s disproportionate power to destabilize the global economy thus requires reducing the share of international trade conducted in dollars.

By: Jochen Andritzky Topic: Global Economics & Governance Date: October 17, 2018
Read article More on this topic More by this author

Blog Post

The international use of the euro: What can we learn from past examples of currency internationalisation?

The recent State of the Union speech by Jean-Claude Juncker sparked a discussion about the potential wider use of the euro on the international stage. Historically, it is not the first debate of this kind. Emmanuel Mourlon-Druol analyses four previous cases of debates on international currencies to reveal the different scenarios associated with their greater use, as well as the need to have a clear objective for a currency’s internationalisation.

By: Emmanuel Mourlon-Druol Topic: European Macroeconomics & Governance Date: October 15, 2018
Read article More on this topic

Blog Post

Italy’s new fiscal plans: the options of the European Commission

The Italian government has announced an increase of its deficit for 2019, breaking the commitment from the previous government to decrease it to 0.8% next year. This blog post explores the options for the European Commission and the procedures prescribed by the European fiscal framework in this case.

By: Grégory Claeys and Antoine Mathieu Collin Topic: European Macroeconomics & Governance Date: October 8, 2018
Read article More on this topic More by this author

Podcast

Podcast

Director’s Cut: The Italian government budget proposal for 2019

Guntram Wolff welcomes Bruegel affiliate fellow Silvia Merler to evaluate the Italian government’s planned budget for 2019, in this Director’s Cut of ‘The Sound of Economics’

By: The Sound of Economics Topic: European Macroeconomics & Governance Date: September 28, 2018
Read article Download PDF

Policy Contribution

European Parliament

Excess liquidity and bank lending risks in the euro area

In this Policy Contribution prepared for the European Parliament’s Committee on Economic and Monetary Affairs (ECON) as an input to the Monetary Dialogue, the authors clarify what excess liquidity is and argue that it is not a good indicator of whether banks’ have more incentives in risk-taking and look at indicators that might signal that bank lending in the euro area creates undue risks.

By: Zsolt Darvas and David Pichler Topic: European Macroeconomics & Governance, European Parliament, Testimonies Date: September 26, 2018
Read article More on this topic More by this author

Blog Post

Something Putin and Juncker appear to agree on – the euro

“It is absurd that Europe pays for 80% of its energy import bill – worth €300 billion a year – in US dollars when only roughly 2% of our energy imports come from the United States,” said President Juncker in his state of the union speech.* Europe’s largest supplier of energy – Russia, who accounts for a third of that bill – couldn’t agree more. Russia’s offer to switch to euros in trade with the EU will likely be costly to implement, but the US switch towards unilateralism is forcing its long-standing partners to question the dollar’s global dominance.

By: Elina Ribakova Topic: European Macroeconomics & Governance Date: September 25, 2018
Read article More on this topic More by this author

Blog Post

Big Macs in big countries: an update on euro area adjustment

Have prices moved in the direction of correcting real exchange rate misalignments everywhere in the euro area in recent years? Not between the largest euro-area economies, i.e. France, Germany and Italy, says evidence from the Big Mac index. However, latest trends may be working in the right direction in these countries too.

By: Konstantinos Efstathiou Topic: Global Economics & Governance Date: September 20, 2018
Read article More on this topic

Blog Post

The economic case for an expenditure rule in Europe

Proposals for reforming the euro area back on the agenda. An overhaul of the European fiscal rules should be on high on this agenda, because the current fiscal framework has not worked well. This column proposes substituting the numerous and complex present rules with a new, simple rule focused on limiting annual growth rate of expenditures.

By: Zsolt Darvas, Philippe Martin and Xavier Ragot Topic: European Macroeconomics & Governance Date: September 13, 2018
Read article More on this topic More by this author

Opinion

Should central European EU members join the euro zone?

Eurozone membership (or the use of a fixed exchange rate) was not a factor determining economic success in Central Europe. There were both good and bad macroeconomic performances in both the flexible and the fixed exchange rate regimes of Central European countries. The implication is that Central European “outs” could be economically successful both with and without the euro, yet the EU is not only about economic benefits.

By: Zsolt Darvas Topic: European Macroeconomics & Governance Date: September 11, 2018
Read article Download PDF More on this topic More by this author

Policy Contribution

High public debt in euro-area countries: comparing Belgium and Italy

This Policy Contribution looks at the evolution of public debt in Belgium and Italy since 1990 and uses the debt dynamics equation to explain the contrasting evolution in the two countries in the run-up to the introduction of the euro, during the early years of the euro and since the beginning of the crisis, arguing that the euro could have been used also by Italy to undertake sufficiently large fiscal adjustment.

By: André Sapir Topic: European Macroeconomics & Governance Date: September 6, 2018
Read article More on this topic More by this author

Opinion

Overcoming the hurdles to Italian Growth

Is the time for refining recommendations and for a serious political debate on how best to overcome bottlenecks and improve the economic prospects of Italians.

By: Guntram B. Wolff Topic: European Macroeconomics & Governance Date: September 4, 2018
Read article More on this topic More by this author

Blog Post

Fighting fear with factfulness – and engagement

Margrethe Vestager, European Commissioner for Competition, delivered the keynote speech at Bruegel's Annual Dinner 2018, held on 3 September 2018.

By: Margrethe Vestager Topic: European Macroeconomics & Governance Date: September 3, 2018
Load more posts