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A new approach to governance and integration in EMU for an optimal use of economic policy framework - priority to financial union

Author

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  • Theodoros S. Papaspyrou

    (Bank of Greece)

Abstract

This paper proposes a new approach to EMU governance and integration consisting of the following elements: (i) an optimal use of the existing EU institutional framework for economic, fiscal and financial policies is necessary and possible at each level of EMU integration that is politically feasible, in order to strengthen synergies between stability and growth policies, complete the single market, support public and private investment, and improve macroeconomic and fiscal coordination and surveillance, (ii) priority should be given to financial union which would facilitate the smooth transmission of monetary policy, enhance financial stability and economic growth and contribute to macroeconomic stabilization through private risk sharing, (iii) the drive to fiscal union should be focused on the creation of fiscal backstops to banking union, enhancing its solidity and credibility (iv) initiatives towards deeper EMU integration should be undertaken where there is strong evidence, within the EU and beyond, of their usefulness and for which widespread political support exists, maximizing benefits and avoiding controversial proposals, and (v) institutional strengthening and democratic accountability are indispensable elements for a successful EMU and should be pursued by following the “Community approach”, based on the Treaties, in contrast to the “intergovernmental approach” increasingly used in recent years.

Suggested Citation

  • Theodoros S. Papaspyrou, 2017. "A new approach to governance and integration in EMU for an optimal use of economic policy framework - priority to financial union," Working Papers 229, Bank of Greece.
  • Handle: RePEc:bog:wpaper:229
    as

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    File URL: http://www.bankofgreece.gr/BogEkdoseis/Paper2017229.pdf
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    References listed on IDEAS

    as
    1. Robert Kollmann & Marco Ratto & Werner Roeger & Jan in't Veld & Lukas Vogel, 2015. "What drives the German current account? And how does it affect other EU Member States?," Economic Policy, CEPR;CES;MSH, vol. 30(81), pages 47-93.
    2. repec:euf:qreuro:0152-01 is not listed on IDEAS
    3. Theodoros S. Papaspyrou, 2007. "Economic Policy in EMU: Community Framework and National Strategies – focus on Greece," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 04, Hellenic Observatory, LSE.
    4. Annabelle Mourougane & Jarmila Botev & Jean-Marc Fournier & Nigel Pain & Elena Rusticelli, 2016. "Can an Increase in Public Investment Sustainably Lift Economic Growth?," OECD Economics Department Working Papers 1351, OECD Publishing.
    5. Gibson, Heather D. & Hall, Stephen G. & Tavlas, George S., 2017. "Self-fulfilling dynamics: The interactions of sovereign spreads, sovereign ratings and bank ratings during the euro financial crisis," Journal of International Money and Finance, Elsevier, vol. 73(PB), pages 371-385.
    6. Feld, Lars P. & Osterloh, Steffen, 2013. "Is a fiscal capacity really necessary to complete EMU?," Freiburg Discussion Papers on Constitutional Economics 13/5, Walter Eucken Institut e.V..
    7. Dirk Schoenmaker & Nicolas Véron, . "European banking supervision: the first eighteen months," Blueprints, Bruegel, number 14868.
    8. European Commission, 2015. "Tax reforms in EU Member States - 2015 Report," Taxation Papers 58, Directorate General Taxation and Customs Union, European Commission.
    9. Papaspyrou Theodoros, 2012. "EMU sustainability and the prospects of peripheral economies," Economic Bulletin, Bank of Greece, issue 36, pages 7-29, April.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Economic governance and integration in EMUq macroeconomic and fiscal adjustment in a monetary unionq economic policy coordinationq banking and capital markets unionq European Stability Mechanism;

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F45 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Macroeconomic Issues of Monetary Unions
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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