Prospects for an EMU between Federalism and Nationalism

Frank Den Butter () and Mathieu L.L. Segers
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Mathieu L.L. Segers: Utrecht University, Utrecht, The Netherlands

No 14-008/VI, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: Which ways and means are available for the macroeconomic and fiscal coordination and/or integration within the EMU-framework? Which are the pros and cons of these scenarios? This paper combines economic theory, empirical analysis and insights regarding EMU’s institutional history in order to come to a compromise proposal for an EMU between nationalism and federalism. We take the present status quo acts as a starting point. We describe the tension between the arguments in economic theory on policy coordination and the way contagion can be avoided. In addition we assess the practical political implementation of these arguments. We sketch concrete options for a ‘deepening of economic coordination’ in the EMU, as announced by Van Rompuy in his 2013 London speech, without moving to a full-fledged federalist EPU.

Keywords: history of EMU; Kronungstheorie; optimal currency area; policy coordination; contagion; EPU; social preferences; EMU’s future (search for similar items in EconPapers)
JEL-codes: E61 F55 G15 H77 N14 (search for similar items in EconPapers)
Date: 2014-01-09
New Economics Papers: this item is included in nep-mac
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