Institutional Reforms

Martina Krobath and Jakub Wtorek

Quarterly Report on the Euro Area (QREA), 2019, vol. 18, issue 2, 57-71

Abstract: This section focusses on how the institutional architecture of the economic and monetary union (EMU) evolved from the launch of the euro until mid-2019. While first attempts to build a monetary union in Europe can be traced back to the end of the 1960s, the basis for the EMU was set with the Delors report of 1989. During the first years of the EMU, the focus was on establishing the foundations of the European Central Bank and the fiscal surveillance framework. However, this focus on monetary and budgetary developments meant that structural differences between EU Member States left them vulnerable to very large macroeconomic imbalances, exposing the euro area to the economic and financial crisis, which started in 2008. The EMU’s institutional architecture became stronger as a result of lessons learnt during the crisis. However, it also became more complex and increasingly subject to intergovernmental solutions and new institutions that were not accountable at EU level. In addition, the rules-based approach to governance has revealed its limitations in delivering a symmetric adjustment and achieving a proper policy mix. This creates potential tensions in the single market area and impedes the international role of the euro. To build a more resilient EMU governance, it could be considered to rebalance it towards stronger institutions — for instance through a representative for economic affairs supported by a treasury — and more effective market discipline to complement the rules-based approach.

Keywords: Euro at 20; institutional architecture; intergovernmental solutions; resilient EMU governance; a representative for economic affairs; treasury; democratic accountability (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
https://economy-finance.ec.europa.eu/system/files/ ... _en_chapter_iv_0.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:euf:qreuro:0182-04

Access Statistics for this article

More articles in Quarterly Report on the Euro Area (QREA) from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission Contact information at EDIRC.
Bibliographic data for series maintained by ECFIN INFO ().