Tamborini, R. & Farina, F. (2014) “Europe’s Stalemate“, Economonitor, 17 Ιουλίου.
The causes of the present crisis of the European Union trace back to the past phases of the integration process. In the 1980s, the series of agreements and common policies of “mutual advantage” among the EU members came to an end. Most economies of scale had been exploited by the EU countries, as an effect of the access by firms to a single and large market after the end of tariff and non-tariff barriers. From then on, any progress on the road of further integration was done at the cost of difficult compromises. Sometimes, the “zero sum” equilibrium of the game entailed negative pay-off for some countries. Eventually, a structural break happened: the completion in Europe of the liberalization process of capital movements in 1990. In the words of Tommaso Padoa Schioppa, the “impossible quartet” consisting of free trade, free capital movements, monetary policy autonomy, fixed exchange rates. The choice was to give up monetary sovereignty to keep the other “public goods”. Yet, in signing the Maastricht Treaty in 1991, it was a mistake to take it for granted that the single market and the single currency would guarantee more integration and less disparities at the same time. Starting from the ERM rules of the EMS, and the stringent guidelines to be fulfilled for the admission to the Monetary Union, the rising conflicts of interests have been geared in the perspective of the hegemonic solution. The German dominance over the monetary integration process substituted for any plan to set-up a cooperative macroeconomic governance opposing the decisive role gained by financial markets as the judges of the national governments’ fiscal stances. With the launch of the euro, and the ECB as the sole common economic institution (though with limited power), the submission to the same “rules of the game” of very heterogeneous productive systems despite the nominal convergence, made the integration strategy to exclusively rely upon the “levelling of the playing field”, that is the idea to give full allowance to harsh competition among countries. But relevant mutual externalities created by the different competitive instruments of national firms and governments did not favour convergence to “virtue”, but magnified real divergence within the Euro Zone. A common house among unequals strongly needs a governance to compensate for disparities which may arise from the functioning of market forces. Since counterbalancing institutional tools were absent, Europe failed in the ambition to provide a growth engine for every member state, further aggravating divergence across the growth – and the well-being – paths of countries participating in the Monetary Union.
Σχετικές αναρτήσεις:
- Pelagidis, Τ. & Mitsopoulos, Μ. (2014) “Greece: From Exit to Recovery?“, Brookings Institution Press, Ιούνιος.
- International Labour Organization (2014) “World Social Protection Report 2014/15, Building Economic Recovery, Inclusive Development & Social Justice“, International Labour Office Geneva, 03 Ιουνίου.
- Ozlem Onaran, Ο. & Stockhammer, Ε. (2014) “Why The Recovery Needs Wage Growth“, Social Europe Journal, 21 Μαΐου.