€-Vision

Commentary & analysis with a focus on European economic policy

Pages

Analysis of the proposal „A constructive approach to Euro Area reform“

by Leave a Comment

A group of 14 prominent economists, seven each from France and from Germany, has issued a detailed and rather comprehensive proposal for reform of the Euro Area (CEPR 2018).* This is a welcome initiative. There is a window of opportunity for reform in the Euro Area. Economically it has been created by the strengthening and increasingly broad economic upturn: policymakers can leave firefighting mode and focus on structural governance reforms. Politically it has been opened up by the 2015 report by the five presidents of the EU institutions, the initiatives by the new French President Macron, the proposals by the European Commission of December 2017, and, most recently, the declarations of intent on Europe emerging from the grand-coalition talks in Germany.

Together Germany and France account for half of Euro Area GDP. The authors of the report are all well-known in policy-oriented circles, while coming from different traditions. For all these reasons the report is set to be very influential. This appraisal follows the structure of the report itself, examining the underlying philosophy and problem analysis (1), the proposals relating to the financial sector (2), to fiscal governance (3) and finally institutional questions (4). An overall assessment with recommendations for extensions and alternatives concludes (5). [Read more…]

Juncker talks the talk: who will walk the walk?

by Leave a Comment

Jean-Claude Juncker’s 2017 State of the European Union (SOTEU) speech was marked, particularly compared with last year’s offering, by a renewed sense of optimism, but also by the urgency of serious institutional reform.

The Commission President covered a wide range of issues and challenges. The overall thrust of his message is that the EU now has the wind in its sails and must seize the opportunity to push ahead, taking further steps to underpin the integration process. That the wind has changed tack is evidenced by the defeat, for now at least, of the populist surge, the slo-mo train-wreck that is Brexit – which has revealed much anti-European rhetoric as simple untruths, and brought home the advantages of close economic integration – and not least the steadily improving economic situation, which has now broadened to many countries badly mauled by the crisis. Unemployment, as Juncker noted, is at a 9-year low.

Perhaps aware of the criticism that the EU is seen as too technocratic and fails to inspire emotions, the Commission President did emotion with a capital E, intertwining personal reminiscences with appeals to values including equality, freedom, the rule of law and transparency.

But it was not just mood music. [Read more…]