Comments and Questions

Francesco Farina and Roberto Tamborini“Completing Europe’s Economic and Monetary Union”. Any Support from the Citizens?The Kiel Institute E-Journal (May 3, 2017)Invited Comment by Gian Cesare Romagnoli – Università Roma Tre The ways of reading texts, and even titles, may of course be different. In our case, and/or better in my opinion, the title of the “Five Presidents Report” does not acknowledge what the Authors claim, i.e. the faulty design of the Monetary Union and its responsibility for the European crisis. To argue this, I observe that the title in question does not mention either a Fiscal or a Political Union, it just speculates on the economic conditions to be satisfied if Europe’s Economic and Monetary Union is to be completed. In representative democracies the political will is expressed before by political acts which, only after, are confirmed or disconfirmed by the electors. After all, the Europe’s Economic and Monetary Integration was not the outcome of popular quests or movements but the political bet of a bunch of dreamers which succeeded to the contrary of others, either tried among countries of the same continent (the EFTA) or among the EEC countries (the Werner Plan).of Farina and Tamborini’s conclusions sound quite acceptable, but I want to make three points on this revised version of the paper: 1. the spring of the Eurozone (EZ) crisis; 2. its political oucome for the European vertical integration perspectives (fiscal and political ones) i.e. the European Governance; 3. the implications of a Fiscal Union. 1. the Eurozone crisis was initially due to the financial markets which marked a financial instability of the PIIGS (either high current deficits or high Debt/GNP ratios) indicated by the rising spreads on their long term bonds interest rates. The No Eurozone (No-EZ) countries were left unscathed and this may account either for their faster economic recovery or their absolute majority of Center Right/Right aggregations;2. economic crises feed asymmetric shocks and divergence for different productive systems and, therefore, a quest for “less Europe”, either fiscal or political one, by the “healthy members” of the EZ to the contrary of the PIIGS; the economic policy heterodirection, aimed at the EZ conservation, and increased through the new economic European Governance, has been considered by the “healthy” EU members a good substitute for sovereign powers devolution; 3. there is little room for non keynesian effects of the austerity, the fiscal discipline is unfriendly to economic growth, but fiscal policy coordination at the EZ level differs from a Fiscal Union, infact this does not only implies devolution of exclusive national powers but also a common responsibility for the members’ debts; completing Europe’s Economic and Monetary Union asks for ruling classes available not only to bear the electoral cost of the policy changes needed to keep in the PIIGS membership but also to share the welfare gains of the Economic and Monetary Integration made by the “healthy” members.