The 2011 governance reform of the Eurozone: Two well-known problems of the centrally planned economies (An Essay)

Peter Mihalyi

Acta Oeconomica, 2011, vol. 61, issue 3, 281-291

Abstract: The protracted sovereign debt crisis within the Eurozone has given rise to new policy questions. In a paradoxical way, the dilemmas confronting the contemporary EU/EMU reformers are similar to those which Socialist planners faced 30–40 years ago. This will be illustrated by two examples: the inherent contradictions of ex ante coordination, and the difficulties in hardening the soft budget constraint mechanism. Deep and far-reaching reforms are not possible without a consensus among those experts who have the ear of the elected leaders. This condition is not fulfilled today, due to the lack of consensus on the diagnosis.

Keywords: European integration; comparative economic systems; planning; soft budget constraint (search for similar items in EconPapers)
JEL-codes: F34 F36 P3 P51 (search for similar items in EconPapers)
Date: 2011
Note: The author greatly benefited from the time and insight of numerous colleagues working at and with the European Commission. In addition, the recommendations of two anonymous referees also helped to finalise the present essay.
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