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High Level Policy Dialogue | Fiscal Rules and Fiscal Capacity

Dates:
  • Mon 23 Sep 2019 09.00 - 19.00
  Add to Calendar 2019-09-23 9:00 2019-09-23 19:00 Europe/Paris High Level Policy Dialogue | Fiscal Rules and Fiscal Capacity

The Eurozone sovereign debt crisis demonstrated the need for a reconstruction of the Economic and Monetary Union. Substantial reforms have been implemented and some new tools introduced during the crisis, but the process is far from complete. Amongst the issues at hand, the question of fiscal capacity is central, and divides member states. Although the academic opinions are also diverse, a majority view among economists suggests that a sustainable monetary union does require a certain degree of fiscal union and/or fiscal capacity. In the case of the EMU, either a general reconsideration of fiscal rules, or the establishment of a Eurozone budget, or both would be needed for stabilisation, especially in the case of asymmetric shocks.

The policy dialogue will take stock of hitherto progress with EMU reform and the consistency of various steps that have been either made or discussed. The main purpose is to explore reform options to strengthen the monetary union. While there may be voices, in some countries, that oppose the existence of the euro and demand the return to national currencies, the dominant view in practically all EU member states is that the euro is here to stay. However, the ambition must be higher than just the survival of the euro. The single currency must have a proven capacity to increase prosperity in Europe. The benefits of monetary integration have to be shared more evenly among countries, sectors and social groups.

The overarching question this dialogue seeks to address is what risks the EU is facing if no further steps are made in the coming years and the EMU architecture is only revisited by leaders at the time or after the next crisis and not before. To put it more concretely, we need to explore the links between the functioning of the EMU and the expressions of discontent with the EU in general, and define the degree of urgency regarding the continuation of reform, especially what concerns a substantial fiscal capacity.

Together with a diverse group of stakeholders, we are attempting a vibrant discussion around risk sharing and risk mitigation, as well as investment and stabilisation. The debate should result in the creation of actionable recommendations on how to bring EMU reform to the next stage, which would empower the EU to face the next economic downturn with much greater resilience than in the previous cycle. In particular, the output of the dialogue will be an assessment of concrete proposals on the table according to their financial, political and social significance.

The model of the School of Transnational Governance’s High Level Policy Dialogues is that of an open discussion among participants. Participation is by invitation only and all deliberations will take place under Chatham House Rules (no views or positions may be attributed publicly to any participants).

Sala del Capitolo, Badia Fiesolana DD/MM/YYYY
  Sala del Capitolo, Badia Fiesolana

The Eurozone sovereign debt crisis demonstrated the need for a reconstruction of the Economic and Monetary Union. Substantial reforms have been implemented and some new tools introduced during the crisis, but the process is far from complete. Amongst the issues at hand, the question of fiscal capacity is central, and divides member states. Although the academic opinions are also diverse, a majority view among economists suggests that a sustainable monetary union does require a certain degree of fiscal union and/or fiscal capacity. In the case of the EMU, either a general reconsideration of fiscal rules, or the establishment of a Eurozone budget, or both would be needed for stabilisation, especially in the case of asymmetric shocks.

The policy dialogue will take stock of hitherto progress with EMU reform and the consistency of various steps that have been either made or discussed. The main purpose is to explore reform options to strengthen the monetary union. While there may be voices, in some countries, that oppose the existence of the euro and demand the return to national currencies, the dominant view in practically all EU member states is that the euro is here to stay. However, the ambition must be higher than just the survival of the euro. The single currency must have a proven capacity to increase prosperity in Europe. The benefits of monetary integration have to be shared more evenly among countries, sectors and social groups.

The overarching question this dialogue seeks to address is what risks the EU is facing if no further steps are made in the coming years and the EMU architecture is only revisited by leaders at the time or after the next crisis and not before. To put it more concretely, we need to explore the links between the functioning of the EMU and the expressions of discontent with the EU in general, and define the degree of urgency regarding the continuation of reform, especially what concerns a substantial fiscal capacity.

Together with a diverse group of stakeholders, we are attempting a vibrant discussion around risk sharing and risk mitigation, as well as investment and stabilisation. The debate should result in the creation of actionable recommendations on how to bring EMU reform to the next stage, which would empower the EU to face the next economic downturn with much greater resilience than in the previous cycle. In particular, the output of the dialogue will be an assessment of concrete proposals on the table according to their financial, political and social significance.

The model of the School of Transnational Governance’s High Level Policy Dialogues is that of an open discussion among participants. Participation is by invitation only and all deliberations will take place under Chatham House Rules (no views or positions may be attributed publicly to any participants).


Location:
Sala del Capitolo, Badia Fiesolana

Affiliation:
School of Transnational Governance

Type:
Special event

Contact:
Fiona Wong (EUI) - Send a mail
 
 

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