Fixing the EU, again
there is a will to create a fiscal capacity at EU level
ECB will remain the most important EU institution
setup for countries like Sweden, that fall in between if integration deepens
Yet again Europe is in crisis management mode.
Until now the European Central Bank has been the only force that has held
Europe together, but the severity of the economic shock has once again exposed
the incompleteness of the currency union, and along with that problems that
cannot be fixed by monetary policy. The pandemic, it seems, has finally created
the political will to create a real, albeit temporary, fiscal capacity at the
In 1976 Jean Monet famously said that
will be forged in crises and will be the sum of the solutions adopted for those
In 2001, Romano Prodi, the then EU commission
“I am sure
the Euro will oblige us to introduce a new set of economic policy instruments.
It is politically impossible to propose that now. But some day there will be a
crisis and new instruments will be created”.
These quotes nicely summarize the current setup;
The design of the currency union was flawed from the outset. The creators of
the Euro knew this, but they achieved what
was politically possible at the time and hoped that the design of economic
institutions would be completed as the monetary area encountered a crisis. And
their hopes were not completely unfounded. In the last crisis the Euro area
gained a central bank willing to act as a lender of last resort, now in the
current crisis common fiscal policy is on the horizon.
For more information please contact
Nerijus Mačiulis, Nerijus.email@example.com, +370 5 258
Heidi.firstname.lastname@example.org, +358 50 328 1229
Vytenis Šimkus Vytenis.email@example.com +370 687 17870
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