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Beukers, Thomas --- "The Eurozone crisis and the autonomy of Member States in economic union: changes and challenges" [2017] ELECD 276; in Koutrakos, Panos; Snell, Jukka (eds), "Research Handbook on the Law of the EU’s Internal Market" (Edward Elgar Publishing, 2017) 263

Book Title: Research Handbook on the Law of the EU’s Internal Market

Editor(s): Koutrakos, Panos; Snell, Jukka

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781783478095

Section: Chapter 13

Section Title: The Eurozone crisis and the autonomy of Member States in economic union: changes and challenges

Author(s): Beukers, Thomas

Number of pages: 26

Abstract/Description:

The recent financial and Eurozone crises have led to a metamorphosis of the EU’s economic and monetary union (EMU), in particular of economic union. EMU was launched at the end of the last century with the aim of complementing the internal market, providing further opportunities for cross-border trade, and eliminating exchange rate instability. However, EMU is not merely a consequence of sound economic logic, but also very much a political project. As a consequence certain other elements of economic logic, for example, relating to optimal currency areas, have been defied, optimistic assumptions were relied on with regard to the convergence of economies, and a specific design of EMU was chosen. In fact, ever since its inception, economic and monetary union has been characterized by the strong asymmetry between a single monetary policy on the one hand, and the lack of a single economic policy on the other hand. In the EU’s economic union a central authority deciding on economic policy in the Union or euro area is lacking. The same is true for a large EU budget, and there is no explicit system of fiscal transfers or fiscal capacity (only some relatively small-scale social and cohesion funds). Instead, there is a system of rules promoting budgetary discipline, which should lead Member States to adopt sound economic and budgetary policy and which should prevent excessive deficits (arts 121 and 126 TFEU). This has resulted in a system of balance rules focusing on debt and deficit.