Abstract
The financial and economic crisis has posed the most serious challenge to the European Monetary Union (EMU) since it was created over eleven years ago. Throughout the crisis, the Euro Area has proven a safe haven for its participating countries as it sheltered them from currency turbulences and severe speculation. It constitutes a core of stability in the single market. The attractiveness of the euro has consequently risen in the eyes of those member states which are not (yet) part of it, notably in Central and Eastern Europe, and which were on average more strongly hit by the crisis than the EMU members. But at the start of 2010, important challenges for the Euro Area persist.
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References
See for instance: Sebastian Dullien/ Daniela Schwarzer: “A Question of Survival? Curbing regional divergences in the Eurozone”, in: Review of Economic Conditions in Italy, no. 1/2006.
The No-Bail-out-Clause in Article 125 TFEU excludes an obligation for the EMU members to bail-out another member state, but this does not mean that there will be no financial assistance in the case of a solvency crisis. The instruments currently applied to the cases of Hungary, Rumania and Latvia are not eligible as the Balance of Payment Loans according to Art. 143 TFEU can only be granted to non-EMU-member states.
For instance with the recommendations to Ireland under the framework of the Broad Economic Policy Guidelines (BEPG) in 2001 which caused a huge national uproar as Ireland was asked to pursue more restrictive fiscal policies for macro-economic reasons — in times when it actually ran a budgetary surplus.
In the Council, Germany and Spain backed the British position which was reluctant to accept a strong European Financial Supervision. If the Council decision of Dec 2nd has to be revised, Germany and France could attempt to find a joint position and, based on this, forge an overall compromise in the Ecofin. In the Parliament, all four “Rapporteurs” in the ECON-Committee are either French or German, and could attempt to influence the national debate on EU Financial Supervision. For an analysis of the Parliament’s role, see: Daniela Schwarzer: Financial Market Supervision: Now comes the European Parliament’s hour, December 3rd, 2009, Eurozonewatch, http://www.euro-area.org/blog/?p=238
The Heads of State and Government of the EMU together with the British Prime Minister.
For instance when establishing the Euro Group and developing it over the years, in the establishment and shaping of the Stability and Growth Pact, the introduction of additional co-ordination mechanisms, and the first Euro Area summit on French initiative in 2008.
The German share in the EU’s GDP is 19%, France’s share amounts to 14%. All GDP data has been taken from: International Monetary Fund, World Economic Outlook Database, October 2009.
See the contribution by Jean-Francois Jamet in this volume.
For an excellent summary and evaluation of this argument see Patrick Artus: « La politique économique de l’Allemagne est-elle un problème pour les autres pays européens ? », Natixis Flash, 8th December 2009, no. 538.
Ibid., p. 4.
See the analysis by Wolfgang Münchau: Divided we fall, Financial Times, October 6, 2009. http:// www.eurointelligence.com/article.581+M5fde5956294.0.html#
Philippe Aghion/Elie Cohen/Jean Pisani-Ferry: “Politique économique et croissance en Europe”; Documentation française, 2006, available online: http://www.cae.gouv.fr/IMG/pdf/059.pdf.
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Schwarzer, D. (2010). What Economic Policy for the Euro Area after the Financial Crisis? The Path Towards a New Franco-German Compromise. In: State of the Union 2010. Springer, Paris. https://doi.org/10.1007/978-2-8178-0175-9_6
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DOI: https://doi.org/10.1007/978-2-8178-0175-9_6
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