EU institutions

Marco Buti, George Papaconstantinou, 23 April 2021

Most of the discussion on the economic policy response to the pandemic in Europe has centred on its ambition, tools, and institutional characteristics. Less discussion has taken place on the factors shaping EU integration and economic policy priorities after the pandemic. In a new CEPR Policy Insight, the authors argue that four sets of issues will be important in shaping the legacy of the pandemic for European integration: redefining the new boundaries between state and market; revisiting the nature of subsidiarity; reconnecting the EU domestic with the global agenda; and learning to respond to longer term structural shifts.

Jan Pieter Krahnen, Jean Pisani-Ferry, Philippe Martin, Lucrezia Reichlin, Beatrice Weder di Mauro, 22 April 2021

The financial crisis of 2007-2012 was the first wake up call to the inadequacy of the euro area architecture when facing a large systemic crisis. This column explains why the Covid crisis will leave a deeper impact on the European policy system, and re-introduces the Vox debate on Europe’s economic architecture in the context of the transformations that we have witnessed over the past year. Contributions to the debate are welcome.

Olivier Blanchard, Álvaro Leandro, Jeromin Zettelmeyer, 22 April 2021

The EU’s fiscal rules are currently suspended. If reinstated, they will need to be modified to account for the higher levels of debt. This column, part of the Vox debate on euro area reform, argues that simple fiscal rules provide a crude and unsatisfactory assessment of debt sustainability and proposes that they be replaced with fiscal standards. In particular, it calls for qualitative prescriptions that leave room for judgement together with a process to decide whether the standards are met. This proposal envisages a larger surveillance role for independent fiscal councils and/or the European Commission, as well as a judicial body for adjudication over disputes. 

Mathias Dewatripont, Lucrezia Reichlin, André Sapir, 16 April 2021

The existing European resolution framework, an essential part of the European banking union, is still largely deficient. National resolution authorities often bypass the European framework, with the result that, since its creation in 2015, the Single Resolution Board has adopted only one resolution decision. This column argues that two aspects of the European resolution framework are particularly in need of reform – the bail-in regime and the resolution mechanism for cross-border banks – and proposes a reform of both.

Eric Monnet, 26 March 2021

Since 2008, a new central banking model has emerged. Monetary authorities increasingly engage in targeted lending, hold large amounts of public debt, and focus on climate change. This column argues that the new practices of central banks call for an updated institutional framework in order to maintain democratic legitimacy. It proposes the creation of a European Credit Council, which would provide impartial assessments of the ECB’s decisions, particularly those with large distributional consequences. In addition, it would develop proposals for coordinating monetary policy with other EU policies and reinforce the role of the European Parliament.

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