Macroeconomic Policy and the European Constitution

Arestis, Philip; Sawyer, Malcolm

doi:10.1057/9780230627352_1

“…We have previously argued Arestis and Sawyer, 2006a, 2006c, 2006d) that in the absence of economic integration, monetary unions without political integration would not have a good chance of long-term survival. It is true, though, that those monetary unions that involve very small countries, for example Eastern Caribbean Currency Union, which covers a total population of half a million, have a better survival possibility.…”

Section: Discussionmentioning

confidence: 99%

Economic and Monetary Union Macroeconomic Policies

Arestis

¹

,

Sawyer

²

2013

Self Cite

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“…We have previously argued (Arestis et al, 2003, Arestis and Sawyer, 2006a, 2006b, 2006c that in the absence of economic integration monetary unions without political integration did not in general have a good record of long-term survival. It is true, though, that those monetary unions involving very small countries, for example Eastern Caribbean Currency Union, which covers a total population of half a million, had a better survival rate.…”

Section: Can the Euro Be Saved?mentioning

confidence: 99%

“…The first is an essentially neo-liberal policy framework (which has been briefly outlined above; see, also, Arestis and Sawyer, 2006c for extensive discussion This framework has been enshrined in law (most recently in the Treaty of Lisbon) and the neo-liberal ideology has become deeply embedded in the European political elite and the institutions of the European Union (and nowhere more evident than in the European Union). The second is that the single currency has been widely viewed as the crowning pinnacle of economic integration in removing what could be seen as the final barrier to free trade (different currencies and the associated costs) after the removal of non-tariff barriers under the Single European Act.…”

Section: Can the Euro Be Saved?mentioning

confidence: 99%

Can the Euro Survive after the European Crisis?

Arestis

¹

,

Sawyer

²

2012

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Abstract:The 'great recession' has highlighted a range of problems with the 'euro project', but these problems and difficulties are related to some fundamental weaknesses of the euro. The convergence criteria established by the Maastricht Treaty focused on nominal rather than real variables, failed to relate to issues such as current account positions. There are wellknown difficulties of macroeconomic policies under the Stability and Growth Pact including its deflationary nature and the 'one size fits all problem' of imposing common deficit requirements on all countries. Problems with the EMU monetary policy are also discussed before the economic performance of the euro area countries is briefly reviewed with attention paid to the differential inflation rates. Also accounted for are the changes in competitiveness as well as the current account deficits, and their implications for the future of economic performance within the euro area, and the euro itself. The nature of the reforms and their impact on the operations of the euro area are examined. The political limits (including those arising from the nature of the Treaty of Lisbon) and the ideological constraints (associated with the neo-liberal agenda) on serious reforms are discussed from which the general conclusion is that the needed reforms are extremely urgent, but unfortunately they will not be carried through. This discussion also includes consideration of the possible role for a substantial EMU-level fiscal policy and some other aspects of political integration. It is concluded that the deep-seated problems are unlikely to be resolved, casting a dark shadow over the future of the euro.

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“…Indeed, the history of monetary unions around the world is very telling. In the absence of economic integration, aq monetary union without a political integration simply cannot survive (Arestis et al, 2003;Arestis and Sawyer, 2006a, 2006b, 2006c. Whether the latter or any other fundamental change is forthcoming, it is unfortunately a very sad expectation.…”

Section: Concluding Commentsmentioning

confidence: 99%

The Euro Crisis

Arestis¹,

Sawyer²

2012

34

0

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Abstract:The 'great recession' has highlighted a range of problems with the 'euro project', but these problems and difficulties are related to some fundamental weaknesses of the euro. The convergence criteria established by the Maastricht Treaty focused on nominal rather than real variables, failed to relate to issues such as current account positions. There are wellknown difficulties of macroeconomic policies under the Stability and Growth Pact including its deflationary nature and the 'one size fits all problem' of imposing common deficit requirements on all countries. Problems with the EMU monetary policy are also discussed before the economic performance of the euro area countries is briefly reviewed with attention paid to the differential inflation rates. Also accounted for are the changes in competitiveness as well as the current account deficits, and their implications for the future of economic performance within the euro area, and the euro itself. The nature of the reforms and their impact on the operations of the euro area are examined. The political limits (including those arising from the nature of the Treaty of Lisbon) and the ideological constraints (associated with the neo-liberal agenda) on serious reforms are discussed from which the general conclusion is that the needed reforms are extremely urgent, but unfortunately they will not be carried through. This discussion also includes consideration of the possible role for a substantial EMU-level fiscal policy and some other aspects of political integration. It is concluded that the deep-seated problems are unlikely to be resolved, casting a dark shadow over the future of the euro.

show abstract

Macroeconomic Policy and the European Constitution

Cited by 6 publications

References 8 publications

Economic and Monetary Union Macroeconomic Policies

Economic and Monetary Union Macroeconomic Policies

Can the Euro Survive after the European Crisis?

The Euro Crisis

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