E pur si muove - European monetary integration after the crisis
Waltraud Schelkle (London School of Economics and Political Science)
15 April 2020, 17:00-18:30
Introduction and Chair: Fabian Mushövel (MW Fellow, SPS)
Explanations of why the European monetary union experienced a crisis are framed in such fundamental terms that an innocent observer may wonder why the union still exists. Economists remind us again and again that it is not an optimal currency area. Political economists have identified two growth models in Northern and Southern Europe that apparently cannot function under a common currency. Political scientists re-discovered the neoliberal ideology that supposedly rules the union, which benefits Germany and Germany only. And yet, it moves. In this lecture, I ask whether the experimental monetary union has moved on from Maastricht. The Maastricht regime was based on a strict separation of monetary and fiscal policy, with financial regulation left to Single Market harmonisation. This functionalist edifice proved untenable when the crisis exposed its incompleteness, especially in terms of a budgetary union. I show that subsequent reforms recognised and developed the interfaces between different policy areas and market institutions. The outcome can be interpreted as a system of re-insurance in which each layer of insurance is deliberately left incomplete. This is arguably a viable solution for an experimental monetary union that was forced by a systemic financial crisis to develop a post-Maastricht regime.
About the speaker
Waltraud Schelkle is Professor in Political Economy at the European Institute of the London School of Economics and Political Science since 2001. Before that, she was an Assistant and Visiting Professor at the Economics Department of the Free University of Berlin, which she joined from the German Development Institute where she worked as a development economist on India. Her research interests include the European monetary union and welfare state integration, which came together in her latest book on 'The Political Economy of Monetary Solidarity' (OUP 2017).