Free ebooks ==> www.Ebook777.com www.Ebook777.com Free ebooks ==> www.Ebook777.com The Future of EMU www.Ebook777.com This page intentionally left blank The Future of EMU Edited by Leila Simona Talani Free ebooks ==> www.Ebook777.com Selection and editorial matter © Leila Simona Talani 2009 Selection and editorial matter © contributors 2009 All rights reserved No reproduction, copy or transmission of this publication may be made without written permission No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6–10 Kirby Street, London EC1N 8TS Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988 First published 2009 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS Palgrave Macmillan in the US is a division of St Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010 Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries ISBN-13: 978–0–230–21841–3 ISBN-10: 0–230–21841–5 hardback hardback This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data The future of EMU / edited by Leila Simona Talani p cm Includes bibliographical references and index ISBN 978-0-230-21841-3 Economic and Monetary Union European Union Euro area Monetary unions—Europe Europe—Economic integration I Talani, Leila Simona HC241.F88 2009 332.4’94—dc22 2008039179 10 18 17 16 15 14 13 12 11 10 09 Printed and bound in Great Britain by CPI Antony Rowe, Chippenham and Eastbourne www.Ebook777.com Al piccolo Gabriellino This page intentionally left blank Contents List of Figures List of Tables List of Contributors Preface x xii xiii xiv Introduction Leila Simona Talani 1 Some Thoughts on Monetary and Political Union Paul De Grauwe Introduction The many dimensions of a political union The theory of optimum currency areas and political union How does political integration affect the optimality of a monetary union? Asymmetric shocks and lack of political union Criticism of the traditional OCA theory Comparing the two views A preliminary evaluation The institutional weakness of the present euro-zone governance 10 Conclusion: the need for further political integration European Fiscal Policy Co-ordination and the Persistent Myth of Stabilization Erik Jones Introduction Stabilization and adjustment Fiscal stabilization International fiscal stabilization Where we go from here? vii 10 11 13 15 18 19 21 22 24 29 29 30 42 47 49 viii Contents The Role of Preferences and the Sustainability of EMU Francisco Torres Introduction Two divergent views on the means to achieve monetary integration in Europe Converging preferences on inflation and the role of monetary policy The first test to the commitment to exchange rate and price stability A framework of analysis for the sustainability of EMU Endogenous preferences Conclusion Globalization vs Europeanization: Assessing the Impact of EMU on Business Cycle Affiliation Michael Artis Introduction Is there a European business cycle? Measuring business cycle affiliations Clustering Globalization vs Europeanization? Conclusion EMU and the Euro-Mediterranean Dialogue: Trade Interdependence between Mediterranean and Euro-area Countries Giorgio Fazio Introduction Currency unions and trade integration south of the Mediterranean The Barcelona Conference and the Euro-Mediterranean Partnership A simple empirical evaluation Data Results Conclusion Data Appendix 54 54 55 57 60 62 66 69 75 75 76 77 78 82 86 89 89 90 92 94 97 97 104 105 Free ebooks ==> www.Ebook777.com Contents In and Out of Monetary Unions: Lessons From, and Risks For the EMU An Alternative Approach to Monetary Unions Antimo Verde Introduction The evolution of the OCA theory A new conceptual scheme: the basic steps The model The model simulations: the two-speed Europe Concluding remarks: the future of EMU and the OCA theory EMU and the Quest for Competitiveness Leila Simona Talani Introduction The quest for competitiveness in theory Conclusion: the future of EMU Structural reforms and the crisis of the SGP The Lisbon Strategy, Macroeconomic Stability and the Dilemma of Governance with Governments (Or Why Europe Is Not Becoming the World’s Most Dynamic Economy) Stefan Collignon Introduction Where the Lisbon Strategy is failing The flawed macroeconomic and institutional framework Conclusion Conclusion: the Future of EMU ix 110 110 112 116 123 134 139 144 144 145 156 161 161 162 175 188 194 Leila Simona Talani Index 198 www.Ebook777.com ... all the book will try to assess the future of EMU in the context of the process of European integration The main question the book seeks to answer is whether EMU can lead to the creation of the. .. directly the issue of the future of EMU by analysing its impact on a variety of EU policies Some authors focus mainly on the consequences of the lack of political union for the legitimacy of the EMU. .. highlights the importance of a political union to reduce the The Future of EMU impact of asymmetric shocks on the public’s assessment of EMU From this point of view the credibility of the member