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Prospects for an EMU between Federalism and Nationalism

Author

Listed:
  • Frank A.G. den Butter

    (VU University Amsterdam, The Netherlands)

  • Mathieu L.L. Segers

    (Utrecht University, Utrecht, The Netherlands)

Abstract

Which ways and means are available for the macroeconomic and fiscal coordination and/or integration within the EMU-framework? Which are the pros and cons of these scenarios? This paper combines economic theory, empirical analysis and insights regarding EMU’s institutional history in order to come to a compromise proposal for an EMU between nationalism and federalism. We take the present status quo acts as a starting point. We describe the tension between the arguments in economic theory on policy coordination and the way contagion can be avoided. In addition we assess the practical political implementation of these arguments. We sketch concrete options for a ‘deepening of economic coordination’ in the EMU, as announced by Van Rompuy in his 2013 London speech, without moving to a full-fledged federalist EPU.

Suggested Citation

  • Frank A.G. den Butter & Mathieu L.L. Segers, 2014. "Prospects for an EMU between Federalism and Nationalism," Tinbergen Institute Discussion Papers 14-008/VI, Tinbergen Institute.
  • Handle: RePEc:tin:wpaper:20140008
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    References listed on IDEAS

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    More about this item

    Keywords

    history of EMU; Kronungstheorie; optimal currency area; policy coordination; contagion; EPU; social preferences; EMU’s future;

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-

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