“Reassessing  the  EU  Monetary  and  Fiscal  Framework:    

a  challenge  for  the  Euro  Area,  a  challenge  for  the  ADEMU    Horizon  2020  Project”      

Ramon  Marimon  ADEMU  Project  Scienti4ic  Coordinator,  

European  University  Institute  &  UPF  –  Barcelona  GSE      

ADEMU   4  

       1.  The  Fiscal  Compact    –  Eco.  stab.  &  limiting  redistribution  with  4iscal  restraint?  

2.  The  European  Stability  Mechanism  (ESM)  –  As  a  crisis  prevention  or  risk  sharing  mechanism?  

3.  The  European  Banking  Union  (EBU)  –  Financial  stab.  &  breaking  the  link  private–sovereign  debt?  

4.   The  Macroeconomic  Imbalance  Procedure  (MIP)  –  Peer  or  real  pressure,  to  coordinate  structural  reforms,  4iscal  policies  and  prevent  macroeconomic  imbalances?        

+  The  European  Central  Bank  (ECB)  –  Providing  ‘4iring  power’  to  ESM  &  control  to  EBU?  

 

The strength of the Euro Area: �The ECB & 4 new pieces since 2010

The strength of the ECB through the Euro crisis: �Spreads in the EA & Draghi’s “whatever it takes”

The weakness of our deeper recessions�(“Five  Presidents’  Report:  Analytical  Note  ”,  February  2015)  

The weakness of moving apart�(“European  Economic  Snapshot”,  T.  Cooley  et  al.,  Sept.  2015)  

The weakness of the Human Capital divide: �Labour productivity in the EA (EU 28 = 100)

       1.  The  Fiscal  Compact    –  Where  is  the  credibility  test?  

2.  The  European  Stability  Mechanism  (ESM)  –  What  about  the  risk  sharing  mechanism?  

3.  The  European  Banking  Union  (EBU)  –  Almost  there…  but  no  need  for  a  4iscal  backup?  

4.   The  Macroeconomic  Imbalance  Procedure  (MIP)  –   Too  much  to  be  handled  with  just  peer  pressure?      

+  The  European  Central  Bank  (ECB)  –   Monetary  and  Fiscal  policy  without...  

 

The weakness of the Euro Area: �The ECB & 4 immature and incomplete pieces

the missing body?

These are questions on the table of

---... ...

Eurogroup

European Council Council of the European Union

The Eurogroup is an informal body where the ministers of the euro area member states discuss matters relating to their shared responsibilities related to the euro.

Its main task is to ensure close coordination of economic policies among the euro area member states. It also aims to promote conditions for stronger economic growth.

the informal body:

the body:

them talking:

5 Presidents reporting:

…et al.

These are questions that require � and stimulate research

•  On  how  4iscal  and  monetary  policies  interact,  and  should  interact,  in  a  heterogeneous  Fiscal  and  Monetary  Union.  

•  On  how  to  achieve  debt  sustainability,  risk-­‐sharing  and  4inancial  stability.  

•  On  the  political  economy,  and  the  legal  requirements,  of  designing  credible  policies  and  institutions.  

 •  On  how  to  avoid  negative  spillovers  and  build  trust.  

•  On  how  to  learn  from  past  crises  and  jointly  thrive.  

hFp://ademu-­‐project.eu    

Horizon  2020  The  Framework  Programme  for  Research  and  InnovaAon  

policy oriented basic research, as the one of

The consortium

List of Participants:

Participant No Participant Organisation name Country

1 (Coordinator) European University Institute (EUI) Italy 2 University of Cambridge (CAM) UK

3 University of Bonn, (BGSE) Germany 4 Toulouse School of Economics (TSE) France

5 University College London (UCL) UK 6 Catholic University of Portugal (CUP) Portugal

7 Barcelona Graduate School of Economics (BcnGSE) Spain 8 Charles University in Prague (CERGE) Czech Republic

The structure

The people

•  50  researchers  in  the  project  •  PhD  students  getting  involved    – ADEMU  Working  Groups  (e.g.  EUI  with  18  PhD  res.)    

•  35  Associate  Researchers…  

•  Support  team:    – Project  manager:  Margherita  Fabbri    – Project  4inance:  Serena  Scarcelli    – Dissemination  team:  Clara  Kirchner  &  Sarah  Grosvenor  

 

The ADEMU Advisory Committee

•  Thomas  F.  Cooley  (NYU  –  Stern)  [Chair]  •  Sir  Charles  Bean  (LSE)  •  José  Manuel  Campa  (IESE  &  Grupo  Santander)  •  Jean-­‐Pierre  Danthine  (Swiss  National  Bank)  •  Lars  Peter  Feld  (Walter  Eucken  Institut  &  University  of  Freiburg)  

•  Lucrezia  Reichlin  (London  Business  School)  •  Thomas  J.  Sargent  (New  York  University)  •  René  Smits  (University  of  Amsterdam)  

The research Work Packages  

1.  Long-­‐term  sustainability  of  a  monetary  and  fiscal  union    

2.  StabilisaAon  policy  in  currency  unions  

3.  Macroeconomic  and  financial  imbalances  and  spillovers  

4.  Policy  ImplementaAon        

The horizon

Final Conference: The  state  of  the  Van  Rompuy  roadmap  in  2018  

Florence,  March  2018  Hosted  by  the  European  University  Institute