Working Breakfast: Future of the European Monetary Union – How to deepen the Eurozone?

The Cologne Institute for Economic Research (IW Köln) and the Association of German Banks (BdB) have successfully launched a series of events on the topic of the European Financial Markets.

The European Monetary Union (EMU) represents a major step in the integration of EU economies. The recently published Reflection Paper of the European Commission offers various ideas that should help to deepen the EMU and to build a shared vision for the Eurozone. We would like to discuss with you what the next steps could look like.

The working breakfast will start with a welcome note by Christian Ossig, Member of the BdB Senior Management Board, followed by a short keynote by Jürgen Matthes, Head of the Research Unit International Economics and Economic Outlook, IW Köln, who will present research studies on both the functioning of EMU and possible impact of publicly debated ideas such as European Safe Bonds.

focus statements

MEP Paul Tang reminded the audience of French President Emmanuel Macron’s outstanding proposal to Europe – in particular Germany – that he is willing to take the responsibility of reforms, but asks for other countries’ solidarity in the process ahead. The window of opportunities that is open now should be used fast if Macron wants to reap his reform’s fruits.

MEP Jakob von Weizsäcker was more active in his comments to the audience insofar as to invite them into a debate on macro-insurance. He proposed a “European Unemployment Insurance” where each country chips in 0.5% of GDP in “normal times” and gets the money back in “bad times” as well as a catastrophe insurance where premium is determined by the pre-conditions of a Member state’s labour market institution.

His ideas were met with MEP Tang’s disapproval; he was more in favour of a mutual insurance and believe the “catastrophe insurance” was unnecessary since it already existed under the IMF’s authority. He also referred to the political difficulties of pricing workers in different countries with different premiums.

Jürgen Matthes from IW impressed the audience by showing that the skeptics who affirm that the European Monetary Union is an example of “one size doesn’t fit all” are actually wrong since wage flexibility and labour mobility in Europe are in fact similar to the US.

Mr. Gabriele Giudice of the European Commission expressed a strong desire for countries to surrender some sovereignty in order to put forth a single supervision of the financial market which will break the banking nexus.