1. Home
  2. Studies
  3. Targeted reforms instead of more fiscal integration: What is the future for the Economic and Monetary Union (EMU) going to be like?
Jürgen Matthes / Anna Iara IW-Report No. 17 21. June 2016 Targeted reforms instead of more fiscal integration: What is the future for the Economic and Monetary Union (EMU) going to be like?

According to a dominant narrative, the recent crisis has allegedly shown that EMU is not sustainable without fiscal risk sharing. We question this narrative and suggest that a limited set of reforms (mostly focusing on the financial sector) would suffice to make EMU sustainable.

Download PDF
What is the future for the Economic and Monetary Union (EMU) going to be like?
Jürgen Matthes / Anna Iara IW-Report No. 17 21. June 2016

Targeted reforms instead of more fiscal integration: What is the future for the Economic and Monetary Union (EMU) going to be like?

IW-Report

Download PDF

Share this article:

or copy the following link:

The link was added to your clipboard!

German Economic Institute (IW) German Economic Institute (IW)

According to a dominant narrative, the recent crisis has allegedly shown that EMU is not sustainable without fiscal risk sharing. We question this narrative and suggest that a limited set of reforms (mostly focusing on the financial sector) would suffice to make EMU sustainable.

This debate has gained traction recently with the Five-Presidents-Report and a work programme of the EU Commission.

In brief, we argue that:

  • The recent crisis was exceptional, because several extraordinary factors contributed to its severity that are unlikely to repeat.
  • The remaining crisis legacy is likely to be temporary and should thus be tackled with temporary instruments only, such as the ECB’s unconventional monetary policy, for example.
  • Reforms already implemented and yet to be taken can prevent excessive financial cycles in the future so that future crises in the euro area will be less severe.
  • The functioning of EMU has been improved by recent reforms and need to be enhanced by some additional reforms mainly regarding the financial market.
  • On this basis, euro area countries will be much better able to deal with idiosyncratic crises of a more “standard” size.
Download PDF
What is the future for the Economic and Monetary Union (EMU) going to be like?
Jürgen Matthes / Anna Iara IW-Report No. 17 21. June 2016

Jürgen Matthes / Anna Iara: On the Future of EMU: Targeted reforms instead of more fiscal integration

IW-Report

Download PDF

German Economic Institute (IW) German Economic Institute (IW)

Share this article:

or copy the following link:

The link was added to your clipboard!

More on the topic

Read the article
Financing Gaps of Companies during the Covid-19 Pandemic
Markus Demary / Anna-Maria Hagenberg / Jonas Zdzralek IW-Report No. 50 28. September 2022

Financing Gaps of Companies during the Covid-19 Pandemic

For firms’ business and investment decisions their access to finance is a critical determinant. In times when access to finance becomes tight, corporations face either higher capital costs or they have to postpone their investment decisions when credit lines ...

IW

Read the article
Markus Demary / Anna-Lena Herforth / Jonas Zdrzalek IW-Report No. 16 13. April 2022

The new inflationary environment: How persistent are the current inflationary dynamics and how is monetary policy expected to respond?

We argue that the period of low inflation has come to an end based on six structural factors, which define the new inflationary environment.

IW

Content element with id 8880 Content element with id 9713