Ferdinando Giugliano, (2018), “The Logical Next Step for Europe’s Integration”, BloomberView, 25 April
For the past year, euro-zone leaders have vowed to take steps to complete Europe’s monetary union. The 19 countries share a single currency and a central bank, but they still lack all the necessary mechanisms to deal with major imbalances and shocks. While some members would like to have more fiscal transfers and a common safety net for the banks, others worry about subsidizing laggards and encouraging moral hazard.
The European Council at the end of June is widely seen as the last opportunity for some time to agree on an agenda of reforms. Afterwards, politicians will start to campaign ahead of the elections for the European Parliament next spring. With euroskeptic forces on the rise across the currency union, mainstream parties will have little appetite for negotiations over institutional reform in the run-up to the vote.
Political leaders won’t say what would count as a success in June. But I would argue that the real test is whether the euro zone agrees to a roadmap for common deposit insurance. This would show that European governments are willing to go further in supporting each other in the event of a crisis.
Relevant Posts
- Nauro Campos, Corrado Macchiarelli, (2018), «A history of the European core and its periphery: How an optimal currency area forms», VoxEU, 12 March
- Nauro F. Campos and Corrado Macchiarelli, (2018), «Symmetry and Convergence in Monetary Unions», LSE, LEQS Paper No. 131/2018, March