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The 2011 governance reform of the Eurozone: Two well-known problems of the centrally planned economies (An Essay)

Author

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  • P. Mihályi

    (Central European University, Department of Economics, Nádor utca 9, H-1051 Budapest, Hungary)

Abstract

The protracted sovereign debt crisis within the Eurozone has given rise to new policy questions. In a paradoxical way, the dilemmas confronting the contemporary EU/EMU reformers are similar to those which Socialist planners faced 30–40 years ago. This will be illustrated by two examples: the inherent contradictions of ex ante coordination, and the difficulties in hardening the soft budget constraint mechanism. Deep and far-reaching reforms are not possible without a consensus among those experts who have the ear of the elected leaders. This condition is not fulfilled today, due to the lack of consensus on the diagnosis.

Suggested Citation

  • P. Mihályi, 2011. "The 2011 governance reform of the Eurozone: Two well-known problems of the centrally planned economies (An Essay)," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 61(3), pages 281-291, September.
    • Handle: RePEc:aka:aoecon:v:61:y:2011:i:3:p:281-291
    Note: The author greatly benefited from the time and insight of numerous colleagues working at and with the European Commission. In addition, the recommendations of two anonymous referees also helped to finalise the present essay.
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    More about this item

    Keywords

    European integration; comparative economic systems; planning; soft budget constraint;
    All these keywords.

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • P3 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions
    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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