Reconciling Governance and Model: A Five-fold Narrative for Europe
Publication with the support of the IED, the European Parliament and Madariaga
How is it that the euro, which could provide the springboard for Europe to project itself as a robust economy and a global player in the 21st century, is surreptitiously turning into a deadly trap, not only for the eurozone itself, but potentially for the Single Market and therefore the whole EU? It is indeed increasingly obvious that, without a central last resort lender and a central fiscal backstop for sovereigns and banks which only a central budget and a banking union can secure, the eurozone will operate below its growth potential and above a sustainable level of unemployment. The eurozone is today working as a machine for creeping deflation, for divergence between North and South and for growing inequalities within countries. Can intergovernmental incrementalism trace a path back towards growth from the overindebtedness of sovereigns and banks while ensuring the integrity and the cohesion of the eurozone? Or can leapfrogging into a federal monetary union alone consolidate the political construction of Europe in an age of economic stagnation and strategic uncertainty? Could such a move be achieved without a radical reworking of strategic thinking in Europe? These reflections are building up on a set of original and robust contributions made by five prominent economists and lawyers during the conference held by the IED and the Madariaga-College of Europe Foundation at the European Parliament on 25 April 2013.