Convergence in the EU: Forging sustainable growth: The issue of convergence of preferences and institutions in EMU

Intereconomics

Volumn 48, Issue 2, 2013, Pages 72-77

  Bongardt, Annette ^a,b   Torres, Francisco ^a,b  

^a EUROPEAN UNIVERSITY INSTITUTE   (Italy)

^b UNIVERSITY OF OXFORD   (United Kingdom)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84876344962     PISSN: 00205346     EISSN: 1613964X     Source Type: Journal    
DOI: 10.1007/s10272-013-0448-9     Document Type: Article

References (30)

1. On the knock-on (domino) effects of more profound EU economic integration and for a discussion of the efficiency properties of the internal market (BE-COMP model), see R. Baldwin, C. Wyplosz: The Economics of European Integration, 4th ed., New York 2012, McGraw-Hill.
2. The simplistic presumption of equating economic growth and higher levels of GDP per capita with more well-being/happiness is of course open to criticism and subject to further research. See for instance D. Coyle: The Economics of Enough: How to Run the Economy as if the Future Matters, New Jersey 2011, Princeton University Press.
3. See J. Pelkmans: European Integration: Methods and Economic Analysis, Essex 2006, Prentice Hall, 3rd ed., for a discussion.
4. See L. Schuknecht, P. Moutot, P. Rother, J. Stark: The Stability and Growth Pact-Crisis and Reform, European Central Bank Occasional Paper 129, September 2011.
5. See A. Bongardt, F. Torres: The Lisbon Strategy, in: E. Jones, A. Menon, S. Weatherill (eds.): The Handbook on the European Union, Oxford 2012, Oxford University Press, pp. 469-483.
6. It is interesting to note that the EU's approach-explicitly aimed at creating bottom-up support for reforms of the mixed economy so as to raise competitiveness and driven by values (efficiency, but also fairness and sustainability)-contrasts with the US relative neglect of considering the complementary role of the state in the economy in areas such as education, research, environmental regulation or financial regulation. See J. Sachs: The Price of Civilization, London 2012, Vintage Books, Random House Group Ltd.
7. See for instance A. Bongardt, F. Torres: The Competitiveness Rationale, Sustainable Growth and the Need for Enhanced Economic Coordination, Forum: Europe 2020-A Promising Strategy?, in: Intereconomics, Vol. 45, No. 3, 2010, pp. 136-141.
8. See B. Ardy, I. Begg, W. Schelkle, F. Torres: How will EMU affect Cohesion?, in: Intereconomics, Vol. 37, No. 6, 2002, pp. 300-314.
9. S. Tilford, P. Whyte: The Lisbon Scorecard X, Centre for Economic Reform, Brussels 2010.
10. Another interesting finding is the EU's failure to integrate the sustainability objective into the Lisbon Strategy for growth. It is probably fair to say that the more immediate concerns with combatting the crises' effects and fostering growth have somewhat eclipsed long-term sustainability concerns and their growth potential in the EU policy discussion. See A. Bongardt, F. Torres: Economic governance and sustainability, forthcoming as Chapter 8 in: A. Verdun, A. Tovias (eds): Mapping European Economic Integration, Basingstoke 2013, Palgrave Macmillan.
11. See H. Enderlein: The Euro and Political Union: Do Economic Spillovers from Monetary Integration Affect the Legitimacy of EMU?, in: Journal of European Public Policy, Vol. 13, No. 7, 2006, pp. 1133-1146.
12. See P. De Grauwe: Some Thoughts on Monetary and Political Union, in: S. Talani (ed.): The Future of EMU, Basingstoke, 2009, Palgrave Macmillan, pp. 9-28.
13. See J. Pelkmans: European Integration: Methods and Economic Analysis, Essex 2006, Prentice Hall, 3rd ed., for a discussion.
14. With the crisis, economic (labour mobility, wage flexibility, financial market integration) and political/institutional adjustment mechanisms (public insurance mechanisms) as well as the coordination of a number of policies, such as social policy, have been evolving in the direction of more integration.
15. F. Torres: The Strategic role of the ECB: independence and accountability in the context of the euro crisis, in: Journal of European Integration, Vol. 35, No. 3, 2013, forthcoming.
16. Speech by Mario Draghi, President of the European Central Bank at the Global Investment Conference, London, 26 July 2012, http://www. ecb.int/press/key/date/2012/html/sp120726.en.html.
17. Namely, the ECB's Securities Markets Programme, Longer-Term Refinancing Operations and Outright Monetary Transactions.
18. M. Draghi: The future of the euro: stability through change, Contribution from the President of the ECB, Die Zeit, 29 August 2012.
19. M. Salines, G. Glöckler, Z. Truchlewski, P. del Favero: Beyond the Economics of the Euro-Analysing the Institutional Evolution of EMU: 1999-2010, in: ECB Occasional Paper 127, September 2011.
20. J. Macedo, D. Cohen, H. Reisen: Monetary Integration for Sustained Convergence: Earning Rather than Importing Credibility in: J. Macedo, D. Cohen and H. Reisen (eds.), Don't fix don't float, Paris: OECD Development Centre, 2001, pp. 11-53
21. E. Jones: The Economic Mythology of European Integration, in: Journal of Common Market Studies, Vol. 48, No. 1, 2010, pp. 89-109.
22. See G. Roland: Understanding institutional change: Fast-moving and slow-moving institutions, in: Studies in Comparative International Development, Vol. 38, No. 4, 2004, pp. 109-131, according to whom "culture", which includes values, beliefs, and social norms, like technology, evolves slowly and continuously and is certainly a determinant of economic growth.
23. See M. Arghyrou, A. Kontonikas: The EMU Sovereign-Debt Crisis: Fundamentals, Expectations and Contagion, in: European Economy Economic Papers, No. 436, February 2011. One should add that the lack of market pressure also relaxed the pressure for enacting better institutional EU governance frameworks of economic monitoring and new coordination mechanisms, thereby further aggravating real divergence within the eurozone.
24. F. Torres: The Strategic role of the ECB: independence and accountability in the context of the euro crisis, in: Journal of European Integration, Vol. 35, No. 3, 2013, forthcoming.
25. K. Rogoff: The Optimal Degree of Commitment to an Intermediate Monetary Target, in: The Quarterly Journal of Economics, Vol. 100, No. 4, 1985, pp. 1169-1189.
26. As suggested by A. Follesdal, S. Hix: Why There is a Democratic Deficit in the EU: A Response to Majone and Moravcsik, in: Journal of Common Market Studies, Vol. 44, No. 3, 2006, pp. 533-62, increased politicisation may enhance legitimacy, since a democratic polity requires contestation for political leadership and with regard to policies.
27. Besides the monetary dialogue with the ECB, with the adoption of the "six-pack", the European Parliament has engaged in an economic dialogue with the Council of the European Union, the European Council, the Eurogroup and the European Commission. It has also significantly influenced the "six-pack" and the SSM. For a discussion see P. de Schoutheete and S. Micossi: On political union in Europe: The changing landscape of decision-making and political accountability, CEPS Essay, No. 4, February 2013.
28. S. Collignon: Democratic Surveillance or Bureaucratic Suppression of National Sovereignty in the European Union? Ideas on the Multilateral Surveillance Regulation, Briefing Paper for the Economic and Monetary Affairs Committee of the European Parliament, September 2010.
29. In regard to the centralisation of monetary policy in the eurozone, and with the exception of Germany, there has been an increase of accountability or at least in responsiveness and in any case of transparency. The same is true for various policies under the ordinary legislative procedure.
30. It is interesting to note that the EU's approach-explicitly aimed at creating bottom-up support for reforms of the mixed economy so as to raise competitiveness and driven by values (efficiency, but also fairness and sustainability)-contrasts with the US relative neglect of considering the complementary role of the state in the economy in areas such as education, research, environmental regulation or financial regulation. See J. Sachs: The Price of Civilization, London 2012, Vintage Books, Random House Group Ltd.