EU institutions

Marco Buti, Nicolas Carnot, 07 December 2018

The debate continues over the needed ingredients for a stable Economic and Monetary Union. Some authors have argued that the completion of a financial union (banking union and capital markets union) together with sound national fiscal policies eliminate the need for common budgetary instruments. The authors of this column beg to disagree and re-state the case for a central fiscal capacity. In essence, whilst financial union and a euro area fiscal stabilisation are substitutes in normal times, they are complementary in bad times. 

Michel Heijdra, Tjalle Aarden, Jesper Hanson, Toep van Dijk, 30 November 2018

A central fiscal capacity is a recurring topic in discussions on reform of the Economic and Monetary Union, but no consensus on the usefulness and necessity of a such a capacity has been reached. This column, part of the Vox debate on euro area reform, argues that the potential stability benefits of a central fiscal capacity can be achieved through stronger financial market risk sharing and more effective use of fiscal stabilisers, without any additional fiscal risk sharing.

Arthur Dyevre, Monika Glavina, Nicolas Lampach, Michal Ovádek, Wessel Wijtvliet, 22 November 2018

Twenty-eight months after the Brexit referendum, EU laws, regulations, and doctrines continue to apply to UK residents and state officials. This column shows that UK judges and litigants have already started to move away from EU law in anticipation of Brexit, with judges submitting 22–23% fewer questions to the European Court of Justice since the referendum. The broader lesson for the future of supranational legal systems is that effective disintegration may precede formal withdrawal, or may occur even if formal withdrawal is delayed or does not come about.

Christiane Nickel, Derry O'Brien, 20 November 2018

Just like other central banks, the ECB generally monitors a range of measures of underlying inflation to help distinguish noise from signal in headline inflation. This column describes measures of underlying inflation that are routinely used at the ECB for measuring euro area headline inflation and provides some insights on their interpretation. Each of the measures has merits and shortcomings and they should be taken together in arriving at a first-pass assessment of developments in headline inflation. At the same time, the measures need to be complemented by a more structural examination of their driving forces in order to better understand the inflation process.

Anne-Laure Delatte, 23 October 2018

The agenda to fix the euro is hampered by conflicting national interests. Creditor countries demand fiscal house cleaning and debtor countries ask for risk sharing. There is currently a political deadlock about how the adjustment burden should be distributed, perpetuating a state of vulnerability that is not in the collective interest of euro area members. This column, part of the Vox debate on euro area reform, argues that overcoming this coordination failure requires reforming the political governance of the EU, rather than just its economic governance.

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