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The Future of Economic Governance in the Eurozone

 

 

The Future of Economic Governance in the Eurozone

Policy Network WWWforEurope

 Workshop

London, 28 October 2014

 

On October 28th Policy Network organised a WWWforEurope workshop on the future of the Eurozone as part of its contribution to Area 4. Despite significant reforms in the last few years, there is a widespread feeling that EU economic governance remains sub-optimal. The workshop discussed whether policy-makers should consider new institutional changes, both from an economic and a democratic point of view. The top line that emerged was that Europe is not lacking institutions in the short term, but political leadership.

In the first session dedicated to economic problems, André Sapir, member of the WWWforEurope Scientific Board, stressed the need for more convincing political leadership to navigate fiscal and economic divergences and restore trust in the short term. Kalypso Nicolaidis of Oxford University suggested that the Eurozone should move away from strict conditionality and encourage mutual commitments between member states. Harold James of Princeton University argued that, in the long run, the Eurozone, and France and Germany more specifically, would need to overcome conflicting economic cultures and build upon the vision of an "insurance union". As the US example shows, an unemployment benefit scheme that would serve as an automatic stabiliser could be introduced without requiring much harmonisation.

The second session was dedicated to improving the democratic dimension of Eurozone governance. Speakers such as Richard Corbett MEP, Agata Gostynska from the Centre for European Reform, and Albert Weale, from University College London, stressed the desirability of greater involvement by national parliaments into Eurozone debates. However, a lot could be done within the existing framework, as illustrated by the Nordic "model" of holding governments to account ahead of Council meetings. The European Parliament had also a role to play to defend Europe’s collective interest.

Around 40 people attended the workshop, from policymaking, media and academic spheres.

Recordings of the two sessions are available.