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The evolution of European economic institutions during the COVID‐19 crisis

Author

Listed:
  • Antoine Camous

    (Universität Mannheim)

  • Grégory Claeys

    (CNAM - Conservatoire National des Arts et Métiers [CNAM] - HESAM - HESAM Université - Communauté d'universités et d'établissements Hautes écoles Sorbonne Arts et métiers université)

Abstract

This article argues that the incomplete economic and institutional integration of the euro area has exposed the monetary union to increasing economic divergence, which could be deepened by the COVID-19 crisis. We discuss how monetary and fiscal measures implemented at the onset of the pandemic have contributed to mitigate the economic consequences of lockdowns, but provided limited insurance to narrow economic gaps across member countries. However, EU countries agreed on July 21, 2020 to develop, for the first time, countercyclical fiscal transfers financed by common debt issuance. We discuss the potential of this instrument to contribute to improve the resilience of the eurozone.

Suggested Citation

  • Antoine Camous & Grégory Claeys, 2020. "The evolution of European economic institutions during the COVID‐19 crisis," Post-Print hal-03972146, HAL.
    • Handle: RePEc:hal:journl:hal-03972146
    DOI: 10.1002/epa2.1100
    Note: View the original document on HAL open archive server: https://cnrs.hal.science/hal-03972146
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    References listed on IDEAS

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    2. Antoine Camous & Russell Cooper, 2019. ""Whatever It Takes" Is All You Need: Monetary Policy and Debt Fragility," American Economic Journal: Macroeconomics, American Economic Association, vol. 11(4), pages 38-81, October.
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    5. Grégory Claeys, 2020. "The European Central Bank in the COVID-19 crisis- whatever it takes, within its mandate," Policy Contributions 36749, Bruegel.
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