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Breuss, Fritz --- "Is EMU a leading indicator for political union? A discussion of five theses" [2004] ELECD 170; in Liebscher, Klaus; Christl, Josef; Mooslechner, Peter; Ritzberger-Grünwald, Doris (eds), "The Economic Potential of a Larger Europe" (Edward Elgar Publishing, 2004)

Book Title: The Economic Potential of a Larger Europe

Editor(s): Liebscher, Klaus; Christl, Josef; Mooslechner, Peter; Ritzberger-Grünwald, Doris

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843769620

Section: Chapter 25

Section Title: Is EMU a leading indicator for political union? A discussion of five theses

Author(s): Breuss, Fritz

Number of pages: 12

Extract:

25. Is EMU a leading indicator for
political union? A discussion of
five theses
Fritz Breuss1

Generally, economic and monetary union (EMU) is seen as the endpoint
of economic integration. However, in the case of the European Union,
EMU implies an asymmetric economic policy-making architecture with a
centralized monetary policy regime but decentralized economic (primarily
fiscal) policies that remain the responsibility of the member states (see
Breuss, 2002a). This requires a complex process of policy coordination. As
the recent practice indicates this architecture has been fragile even in the
context of the EU-15; it is therefore not farfetched to forecast that it will
become even more unstable and complex in an enlarged EU (see Breuss
et al., 2003). To sketch the problems connected with enlargement and
EMU, I will discuss five theses in the following.


1. IS THE EMU PROJECT AN EXAMPLE OF A NEW
`JEAN MONNET EFFECT'?

At the onset, EMU was apparently seen as a project with a so-called `Jean-
Monnet effect': instead of directly establishing a political union or even the
United States of Europe, one hoped for its indirect enforcement through the
euro. This, however, would imply that the constraints to coordinate eco-
nomic policy broadly would induce an ever stronger centralization of eco-
nomic policies in many areas. The short experience with EMU shows that
apart from the centralized monetary policy, the economic policy areas have
a long way to go towards a properly working European harmonization. Even
the delineation of competences ...