What (Economic) Constitution does the EU need?
AbstractThe European Constitutional Treaty (ECT) was presented by its drafters as an explicit constitution for the European Union (EU 25). A possible explanation for its rejection by the French and Dutch citizens in the course of spring 2005 is that it did not sufficiently amend the implicit constitution of the EU 25, the European Union Treaty (EUT), which was truly the object of votersâ aversion. Assuming this to be true, there should be a thorough debate on the relevance and viability of the de facto current constitution of the European Union. In this paper, we engage in this debate by identifying what is essentially wrong with the economic provisions of the EUT, which we designate as the âEuropean economic constitution.â Using a constitutional political economy approach, we first attempt to demonstrate that both what we define as the âprinciple of integrityâ and the âprinciple of efficiencyâ of collective action appear to be violated by the European economic constitution. This occurs, respectively, because its provisions are not neutral, nor revisable, and because they do not sufficiently allow for the possibility of cooperative collective decision (leading to convergence in welfare) in a more than ever numerous and heterogeneous EU. Our essential argument in this respect regards the implications of the structurally different economic performances and incentives of small and large countries under the European economic constitution. Finally, since the present European trade-off between âintegrityâ and âefficiencyâ appears sub-optimal, we present two original ways of achieving potentially better ones in the EU, through a âGreat compromiseâ or âEconomic constitution(s),â expressing a preference for the latter.
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Bibliographic InfoPaper provided by Observatoire Francais des Conjonctures Economiques (OFCE) in its series Documents de Travail de l'OFCE with number 2007-04.
Date of creation: 2007
Date of revision:
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- B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Institutional; Evolutionary
- D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
- N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-
- N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-
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