IDEAS home Printed from https://ideas.repec.org/p/feu/wfewop/y2013m2d0i4.html
   My bibliography  Save this paper

The challenges of EU governance and the quest for long-term growth

Author

Listed:
  • Renaud Thillaye

Abstract

The research paper assesses the opportunities and challenges raised by the post-crisis EU governance system with regard to the transition of European economies towards a new growth model balancing economic performance with social cohesion and environmental responsibility. It begins with questioning the term of ‘governance’ and with a hint at the 'multi-level governance' literature available in EU studies. This section suggests that the EU's nature is one of multiple and innovative policymaking methods. Any assessment of the EU's added value must investigate the actual policy direction and the effectiveness of a complex EU governance architecture, by looking in particular at how EMU coordination frameworks interacts with Community-based policies. The paper focuses then on the goals, the processes and the financial instruments underpinning the Europe 2020 Strategy, bearing in mind the limits encountered by the Lisbon Strategy during the last decade. It finds that the Strategy, albeit carefully balanced, does not avoid the risk of a 'capability-expectations' gap. Implementation would gain, on the one side, from more consistent legal and financial instruments at EU level, and from a more supportive macroeconomic environment in the euro area on the other. The third section examines the way in which Europe 2020 cohabits with other frameworks of coordination within the European Semester, such as the reformed Stability and Growth Pact, and the new Macroeconomic Imbalance Procedure. Potential clashes between diverging objectives and their legal bases are identified and tested against the views of practitioners (8 interviews were conducted in parallel to the research) and throughout a case-study based on how the Semester has so far impacted on three countries: Finland, France and Italy. The European Commission's Annual Growth Surveys for 2011, 2012 and 2013 are also analysed. This research reveals a prioritisation of fiscal consolidation and short-term, market-based adjustment policies over the longer-term objectives pursued by the Europe 2020 Strategy. The collective outcome of these policies, and the impact of national reforms on the whole EU, tend to be overlooked as well. Nevertheless, there is substantial room for manoeuvre and dialogue between the Commission and individual countries. The paper concludes that ways should be found to shield Europe 2020 objectives from overwhelming stability considerations in the Euro Area, and contains some suggestions for further innovations of governance in that respect. A greater differentiation between countries according to their position might be necessary. The conclusion also argues that it fells to national governments, parliaments and parties to seize the opportunity of the European Semester to frame challenges differently and to push for alternative solutions.

Suggested Citation

  • Renaud Thillaye, 2013. "The challenges of EU governance and the quest for long-term growth," WWWforEurope Working Papers series 4, WWWforEurope.
  • Handle: RePEc:feu:wfewop:y:2013:m:2:d:0:i:4
    as

    Download full text from publisher

    File URL: http://www.foreurope.eu/fileadmin/documents/pdf/Workingpapers/WWWforEurope_WPS_no004_MS80.pdf
    File Function: Full text
    Download Restriction: none

    References listed on IDEAS

    as
    1. Christopher D. Carroll, 1997. "Buffer-Stock Saving and the Life Cycle/Permanent Income Hypothesis," The Quarterly Journal of Economics, Oxford University Press, vol. 112(1), pages 1-55.
    2. repec:dgr:rugsom:09002 is not listed on IDEAS
    3. Soon Ryoo & Peter Skott, 2013. "Public debt and full employment in a stock-flow consistent model of a corporate economy," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 35(4), pages 511-528.
    4. Hiro Lee & Joaquim Oliveira Martins & Dominique van der Mensbrugghe, 1994. "The OECD Green Model: An Updated Overview," OECD Development Centre Working Papers 97, OECD Publishing.
    5. Rezai, Armon & Taylor, Lance & Mechler, Reinhard, 2013. "Ecological macroeconomics: An application to climate change," Ecological Economics, Elsevier, vol. 85(C), pages 69-76.
    6. Kees Folmer, 2009. "Why do macro wage elasticities diverge? A meta analysis," CPB Discussion Paper 122, CPB Netherlands Bureau for Economic Policy Analysis.
    7. William C. Brainard & James Tobin, 1968. "Pitfalls in Financial Model-Building," Cowles Foundation Discussion Papers 244, Cowles Foundation for Research in Economics, Yale University.
    8. Backus, David, et al, 1980. "A Model of U.S. Financial and Nonfinancial Economic Behavior," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 12(2), pages 259-293, Special I.
    9. Hyman Minsky, 1994. "Financial instability and the decline(?) of banking: public policy implications," Proceedings 20, Federal Reserve Bank of Chicago.
    10. Kees Folmer, 2009. "Why do macro wage elasticities diverge?," CPB Memorandum 224, CPB Netherlands Bureau for Economic Policy Analysis.
    11. Druckman, Angela & Jackson, Tim, 2009. "The carbon footprint of UK households 1990-2004: A socio-economically disaggregated, quasi-multi-regional input-output model," Ecological Economics, Elsevier, vol. 68(7), pages 2066-2077, May.
    12. J. Daniel Khazzoom, 1989. "Energy Savings from More Efficient Appliances: A Rejoinder," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 157-166.
    13. Soon Ryoo & Peter Skott, 2011. "Public debt and full employment in a stock-flow consistent model of a corporate economy," UMASS Amherst Economics Working Papers 2011-26, University of Massachusetts Amherst, Department of Economics.
    14. Chah, Eun Young & Ramey, Valerie A & Starr, Ross M, 1995. "Liquidity Constraints and Intertemporal Consumer Optimization: Theory and Evidence from Durable Goods," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 27(1), pages 272-287, February.
    15. Jose Luengo-Prado, Maria, 2006. "Durables, nondurables, down payments and consumption excesses," Journal of Monetary Economics, Elsevier, vol. 53(7), pages 1509-1539, October.
    16. Kubiszewski, Ida & Costanza, Robert & Franco, Carol & Lawn, Philip & Talberth, John & Jackson, Tim & Aylmer, Camille, 2013. "Beyond GDP: Measuring and achieving global genuine progress," Ecological Economics, Elsevier, vol. 93(C), pages 57-68.
    17. David Card, 1995. "The Wage Curve: A Review," Working Papers 722, Princeton University, Department of Economics, Industrial Relations Section..
    18. David Card, 1995. "The Wage Curve: A Review," Journal of Economic Literature, American Economic Association, vol. 33(2), pages 285-299, June.
    19. Bezemer, D.J., 2009. "No one saw this coming. Understanding financial crisis through accounting models," Research Report 09002, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    20. Steve Keen, 1995. "Finance and Economic Breakdown: Modeling Minsky’s “Financial Instability Hypothesis”," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 17(4), pages 607-635, July.
    21. Eberly, Janice C, 1994. "Adjustment of Consumers' Durables Stocks: Evidence from Automobile Purchases," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 403-436, June.
    22. McKitrick, Ross R., 1998. "The econometric critique of computable general equilibrium modeling: the role of functional forms," Economic Modelling, Elsevier, vol. 15(4), pages 543-573, October.
    23. José Manuel Rueda-Cantuche & Kurt Kratena & Gerhard Streicher & Frederik Neuwahl & Ignazio Mongelli & Jose M. Rueda-Cantuche & Aurelien Genty & Iñaki Arto & Valeria Andreoni, 2012. "FIDELIO: A fully interregional dynamic econometric long-term input-output model for the EU," EcoMod2012 4082, EcoMod.
    24. Wynne Godley & Marc Lavoie, 2007. "A simple model of three economies with two currencies: the eurozone and the USA," Cambridge Journal of Economics, Oxford University Press, vol. 31(1), pages 1-23, January.
    25. Marc Lavoie & Jun Zhao, 2010. "A Study Of The Diversification Of China'S Foreign Reserves Within A Three-Country Stock-Flow Consistent Model," Metroeconomica, Wiley Blackwell, vol. 61(3), pages 558-592, July.
    26. Klaus Conrad & Tobias Schmidt, 1998. "Economic Effects of an Uncoordinated Versus a Coordinated Carbon Dioxide Policy in the European Union: An Applied General Equilibrium Analysis," Economic Systems Research, Taylor & Francis Journals, vol. 10(2), pages 161-182.
    27. Druckman, Angela & Chitnis, Mona & Sorrell, Steve & Jackson, Tim, 2011. "Missing carbon reductions? Exploring rebound and backfire effects in UK households," Energy Policy, Elsevier, vol. 39(6), pages 3572-3581, June.
    28. Blanchflower, David G & Oswald, Andrew J, 1994. "Estimating a Wage Curve for Britain: 1973-90," Economic Journal, Royal Economic Society, vol. 104(426), pages 1025-1043, September.
    29. Luengo-Prado, Maria Jose & Sørensen, Bent E, 2004. "The Buffer-Stock Model and the Aggregate Propensity to Consume: A Panel-Data Study of the US States," CEPR Discussion Papers 4474, C.E.P.R. Discussion Papers.
    30. Boeters, Stefan & Savard, Luc, 2013. "The Labor Market in Computable General Equilibrium Models," Handbook of Computable General Equilibrium Modeling, Elsevier.
    31. Bezemer, Dirk J., 2010. "Understanding financial crisis through accounting models," Accounting, Organizations and Society, Elsevier, vol. 35(7), pages 676-688, October.
    32. Bezemer, Dirk J, 2009. "“No One Saw This Coming”: Understanding Financial Crisis Through Accounting Models," MPRA Paper 15892, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:feu:wfedel:y:2016:m:2:d:0:i:11 is not listed on IDEAS
    2. repec:feu:wfedel:y:2016:m:2:d:0:i:12 is not listed on IDEAS
    3. Kurt Bayer, 2015. "Institutional Set-up and Conflict Resolution. Implementation of the WWWforEurope Transition Strategy," WWWforEurope Working Papers series 99, WWWforEurope.

    More about this item

    Keywords

    Economic strategy; EU integration; European economic policy; European governance; European Monetary Union; Good governance; Institutional reforms;

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:feu:wfewop:y:2013:m:2:d:0:i:4. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.