The Future of the Eurozone: Towards a European Benchmark*

The European sovereign debt crisis has demonstrated the need for a rethinking of the European Integration Project. The strong variety between member countries prevented the Eurozone to become a fiscal and political union and the asymmetric architecture of the European Monetary Union (EMU) revealed different weaknesses. The outbreak of the Covid-19 emergency may represent a turning point for the EU and makes even more evident that the future of the Eurozone will depend also on the ability of member countries to make their institutional frameworks coexist. Helping member countries to achieve sustainable and stable outcomes, although in idiosyncratic ways, is the task of the European benchmark. It is a framework, inspired by European treaties, that aims to identify inefficiencies in terms of market, state and social failures and negative externalities inside economic, social, and political institutions. This benchmark represents a new tool for a correct evaluation of the economic, social, and political performance of the European member countries.   Note: * A non peer-reviewed version of this article was published as TIGER Working Paper Series No. 143, Warsaw, February 2021).   Cite this paper: Casagrande, Sara; & Dallago, Bruno (2022). "The Future of the Eurozone: Towards a European Benchmark" Journal of World Economy: Transformations & Transitions (JOWETT) 1(03):14. DOI: https://doi.org/10.52459/jowett1314012

UNDERSTANDING EMU ASYMMETRIES AND THEIR ECONOMIC AND POLITICAL IMPLICATIONS

The Covid-19 emergency makes the seriousness of the unsolved political and economic issues that emerged during the European sovereign debt crisis even more evident. Today more than ever it is necessary to answer questions related to the fragility of the EMU architecture: why was the EMU created with an asymmetric structure? What was the role of EMU architecture and European policies during the crisis? Do EMU asymmetries threaten the survival of the Eurozone? The European integration process took place on the basis of a permissive consensus determined by the expectation of successful economic outcomes, without a true democratic legitimacy. Under such conditions, a fiscal and political union was not possible. The EMU proved to be a competitive arena, within which economic and political asymmetries were difficult to manage. An analysis of these asymmetries allows conclusions to be drawn regarding the risks associated with further economic and institutional integration

Interview with Robert A. Mundell

Robert A. Mundell has been Professor of Economics at Columbia University in New York City, New York, since 1974 and University Professor since 2001. In 1999, he was awarded the Nobel Memorial Prize in Economic Science "for his analysis of monetary and fiscal policy under different exchange rate regimes and his analysis of optimum currency areas." We interviewed Professor Mundell at his hotel in Boston, Massachusetts, on January 7, 2006, while attending the annual meeting of the Allied Social Science Associations.