The Economic Crisis and Governance in the European Union This book explores the way in which the financial crisis that began in the US spread to the economy of the European Union It takes a critical look at the measures adopted by EU institutions in response to that crisis, seeking to explain the rationale behind them, their context, their development and why different exit strategies were not adopted In doing this, the book makes comparisons with the measures adopted by institutions in the US and the UK As the crisis has shown that the financial supervision frameworks prevailing in 2007 were not fully able to deal with the largest financial crisis in history, this volume also reviews the proposals that have been designed to reform the supervisory architecture of financial services in the EU The book concludes that the EU member states under most pressure from financial markets suffer from intrinsic problems, but that the economic effects of the crisis have been exacerbated by shortcomings in economic governance within the EU This work will be highly relevant to policy makers and scholars looking at EU integration, finance and market regulation Javier Bilbao-Ubillos is Senior Lecturer in the Department of Applied Economics at the University of the Basque Country, Spain Routledge studies in the European economy Growth and Crisis in the Spanish Economy, 1940–1993 Sima Lieberman Work and Employment in Europe A new convergence? Edited by Peter Cressey and Bryn Jones Trans-European Telecommunication Networks The challenges for industrial policy Colin Turner European Union – European Industrial Relations? Global challenges, national developments and transnational dynamics Edited by Wolfgang E Lecher and Hans-Wolfgang Platzer Governance, Industry and Labour Markets in Britain and France The modernizing state in the mid-twentieth century Edited by Noel Whiteside and Robert Salais 6 Labour Market Efficiency in the European Union Employment protection and fixed-term contracts Klaus Schömann, Ralf Rogowski and Thomas Kruppe The Enlargement of the European Union Issues and strategies Edited by Victoria Curzon-Price, Alice Landau and Richard Whitman European Trade Unions Change and response Edited by Mike Rigby, Roger Smith and Teresa Lawlor Fiscal Federalism in the European Union Edited by Amedeo Fossati and Giorgio Panella 10 European Telecommunications Liberalisation Edited by Kjell A Eliassen and Marit Sjøvaag 11 Integration and Transition in Europe The economic geography of interaction Edited by George Petrakos, Gunther Maier and Grzegorz Gorzelak 12 SMEs and European Integration Internationalisation strategies Birgit Hegge 13 Fiscal Federalism and European Economic Integration Edited by Mark Baimbridge and Philip Whyman 14 Financial Markets in Central and Eastern Europe Stability and efficiency Edited by Morten Balling, Frank Lierman and Andy Mullineux 15 Russian Path Dependence Stefan Hedlund 16 The Impact of European Integration on Regional Structural Change and Cohesion Edited by Christiane Krieger-Boden, Edgar Morgenroth and George Petrakos 17 Macroeconomic Policy in the European Monetary Union From the old to the new stability and growth pact Edited by Francesco Farina and Roberto Tamborini 18 Economic Policy Proposals for Germany and Europe Edited by Ronald Schettkat and Jochem Langkau 19 Competitiveness of New Europe Papers from the second Lancut economic forum Edited by Jan Winiecki 20 Deregulation and the Airline Business in Europe Sean Barrett 21 Beyond Market Access for Economic Development EU–Africa relations in transition Edited by Gerrit Faber and Jan Orbie 22 International Trade, Consumer Interests and Reform of the Common Agricultural Policy Edited by Susan Mary Senior Nello and Pierpaolo Pierani 23 Economic Governance in the EU Willem Molle 24 Financial Integration in the European Union Edited by Roman Matoušek and Daniel Stavárek 25 Europe and the Mediterranean Economy Edited by Joan Costa-Font 26 The Political Economy of the European Social Model Philip S Whyman, Mark J Baimbridge and Andrew Mullen 27 Gender and the European Labour Market Edited by Francesca Bettio, Janneke Plantenga and Mark Smith 28 The Economic Crisis and Governance in the European Union A critical assessment Edited by Javier Bilbao-Ubillos The Economic Crisis and Governance in the European Union A critical assessment Edited by Javier Bilbao-Ubillos First published 2014 by Routledge Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2014 selection and editorial material, Javier Bilbao-Ubillos; individual chapters, the contributors The right of Javier Bilbao-Ubillos to be identified as the author of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988 All rights reserved No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data The economic crisis and governance in the European Union: a critical assessment / edited by Javier Bilbao-Ubillos pages cm Includes bibliographical references and index Financial crises–European Union countries European Union countries–Economic policy–21st century European Union countries– Social policy–21st century Monetary policy–European Union countries I Bilbao Ubillos, Javier, editor HB3722.E2736 2013 337.1'42–dc23 2013019960 ISBN: 978-0-415-85890-8 (hbk) ISBN: 978-0-203-72303-6 (ebk) Typeset in Times by Wearset Ltd, Boldon, Tyne and Wear Contents List of figures List of tables List of contributors Introduction ix xi xii JAvIER BILBAO-UBILLOS PART I Economic crisis in the European Union: roots and structural weaknesses The great recession and economic policy: roots and consequences 11 13 XOSé CARLOS ARIAS AND ANTóN COSTAS Financial supervision reform in the EU: a comparison with the UK and the US 31 ISABEL ARGIMóN, MARÍA LUISA LEYvA AND CRISTINA LUNA The Eurozone, challenging the institutional framework for economic policy 52 RICARDO ALáEz-ALLER AND CARLOS GIL-CANALETA Why so slow? The crisis and the structural weaknesses of the EU MARCO RICCERI 69 viii Contents PART II Praxis of European governance facing the economic crisis: a critical assessment A critical view of the governance of the crisis in Europe: the rationales inherent in exit strategies 91 93 JAvIER BILBAO-UBILLOS Questioning the myth of expansive austerity: European macroeconomic policy during the crisis and its aftermath 114 RAFAEL MUñOz DE BUSTILLO The European sovereign debt crisis and the new governance: a conservative alternative to European economic government 134 FRANCISCO RODRÍGUEz-ORTIz 9 Austerity and financial instability 155 ÀNGEL BERGES AND EMILIO ONTIvEROS References Index 182 196 Figures 3.1 7.1 7.2 7.3 7.4 9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9 9.10 9.11 9.12 9.13 9.14 9.15 9.16 9.17 9.18 9.19 New financial regulatory architecture in the United Kingdom Real GDP growth in the United States and the euro area 2003–2014 (2012–2014 forecasted) Average first year multipliers from different types of fiscal stimulus Estimate of the impact of fiscal policies on GDP growth for several European countries, 2011–2012 Forecast GDP growth, different waves: Spain, Greece, Portugal, Ireland, 2007–2012 Implied bond market volatility in the euro area and the United States Euro area sovereign debt yields (ten year bonds) Probability of any Eurozone country leaving the euro before end 2013 Fiscal fundamentals at beginning of crisis: ratio of fiscal primary balance and net government debt to GDP (2009) Fiscal fundamentals: dynamics since start of crisis Lending activity in the euro area Lending activity in the US Sovereign-financial linkages Central bank balance sheets Sovereign debt holdings, by type of investor (in percentage of total, June 2011) Change in government spending (dg) and change in GDP 2008: Q1 to 2011: Q1 Austerity and GDP growth 2011–2012 Austerity and increases in debt-to-GDP ratios Advanced economies: market induced fiscal adjustment Austerity measures and spreads in 2011 Interest rate growth differential, 2012 Interest payments as a percentage of GDP Change in spreads vs initial spreads Change in debt-to-GDP ratio vs spreads since 2012: Q2 40 116 126 127 129 155 156 157 159 160 161 161 163 165 166 168 168 169 170 170 171 171 173 173 References 187 Escolano, R (2011) “La crisis del euro y la gobernanza europea”, Cuadernos de pensamiento político, 30: 69–90 European Bank Authority (2011) Recommendation and Final Results of Bank Recapitalisation Plan as Part of Co-ordinated Measures to Restore Confidence in the Banking Sector, Frankfurt am Main: European Bank Authority, December European Bank for Reconstruction and Development (2012) Transition Report 2012, available online at: www.ebrd.com/pages/research/publications/flagships/transition shtml (accessed 26 April 2013) European Central Bank (2000) “Potential Output Growth and Output Gaps: concept, uses and estimates”, Monthly Bulletin, October: 37–48, available online at: www.ecb.de/ 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Bildung, 17 January, Bonn Index Adda, J 134, 152 Aglietta, M 144 Alesina, A 121–2, 124 Amor, J.L 106 Andrés, J 98 animal spirits (Keynes) 120 Antonin, C.144 Ardagna, S 121–2 Arias, X.C 14, 18 Artis, M 61 Artus, P 137 Ash, M 107–8 asymmetric governance 2, 97, 136, 143, 153, 156 asymmetric shocks 1–2, 61, 93–4, 99, 112 Auerbach, A.J 21 austerity (in the public sector) 5, 7, 19–21, 24, 88, 106, 108, 110, 115, 120, 122, 128, 130, 132, 135, 137–41, 146, 158, 160, 167–77, 180–1 Australia 122, 123 Austria 61, 78, 102–3, 127, 147, 168 automatic stabilisers 57, 59–62, 66–7, 97, 134 Aznar, J.M 71 bail out (no bail-out) 4, 20, 33, 41, 57, 64, 96, 98, 100, 104–5, 107–10, 134, 136, 139, 142, 146, 151, 167, 180 balance-sheets of banks 1, 56, 63, 104, 109, 142, 150, 154, 165 Bank for International Settlements (BIS) 24 banking-based finance 168 banking (financial markets) fragmentation/ segmentation 14, 28, 36, 108, 156, 162, 175–80 banking (financial system) supervision 2–3, 31–51, 57, 62, 68, 94, 111, 134, 142–3, 181 banking union 2, 3, 36, 38, 49, 181 banking versus market-oriented financial systems 160 Bank of England 6, 27, 38, 40, 105, 108, 158 bank resolution 9, 33, 36, 38, 41, 46–50 bank-sovereign loop 5, 36, 157, 164 bank support programs 163–4 Barro, R.J 119 Basel Committee on Banking Supervision 27, 31–2, 50 Basu, S 133 Bathia, A.V 42 Beck, T 33 Begg, I 7–8 Belgium 61, 102–3, 113, 127, 147, 156, 168, 171 Bergsten, F 2, 152 Bernanke, B 19, 22 Betbèze, J.P 150 Bibow, J 27 Blair, C.E 42 Blair, T 69, 72 Blanchard, O 21, 25, 29, 125, 151 Blinder, A 19 Boccara, P 150 Borio, C 29, 50, 54, 56 Borrás, S 95 Bosworth, D 118 Bourguinat, H 153 Boyer, R 153, 154 Brender, A 138, 153 Briys, E 153 Brown, G 18–19 Bruegel Institute Bulgaria 101–2 Buscher, H.S 61 Busch, K 111–12 Caballero, J.C 94 Index 197 Camba-Méndez, G 55 Cameron, D 77, 90 Celedón, C 95 central bank independence 15–16, 26–8, 38, 148 Chamón, M 28 Chari, V.V 15 Chevallier, A 136 Chowdhury, A 122–3 Ciampi, C.A 75, 90 Cochard, M.144 Cochrane, J.H 118 Coenen, G 125 College of Supervisors 33, 35 Comín, F 2, 154 competitiveness 4, 7, 9, 21, 27, 58–61, 93, 99, 103, 131, 148–9, 152 Conde, F 96, 100 consumer protection 37–44 contingent liability 163 co-ordination, (economic policy) 2, 135, 142–4 Coriat, B 144, 153–4 Cossart, J 153 Costas, A 14, 18 Cottarelli, C 29 Council of the European Union 4, 35, 50, 63, 78–9 Coutrot, T 144, 153–4 Coutts, A 133 Cox, P 71 credit default swaps (CDS) 174 credit rationing 179 Croatia 77 crowding out (effect) 117–21, 138 currency markets cyclically-adjusted deficit 54 Cyprus 1, 4, 101, 104–5, 112, 132, 168 Czech Republic 1, 77–8 Dahrendorf, R 76, 90 Darvas, Z 8–9 Debenedetti, F 81, 90 decision-making processes 2–4, 8, 48, 70, 72, 81, 85, 95–6, 98–9, 105, 109, 111, 119 deficit (democratic) 77–83 deficit (public/budgetary/fiscal) 4, 5, 7, 16, 18, 20–2, 27, 29–30, 54, 58, 60, 97–8, 105, 107–8, 110, 114–20, 122, 124, 128, 130–3, 135, 138, 139, 144, 151, 158, 172–4, 180 deficit (trade/current account/external) 101, 103, 105, 146–9 deflationary bias/risk 7–8, 21, 23, 26, 52–3, 56, 59–60, 67, 108, 142, 151–2 De Gaulle, C 78 De Grauwe, P 7, 93, 105, 112, 120, 141, 153, 167 De la Dehesa, G 154 De Larosière Report 28, 35, 49–50 deliberative democracy 74 Dell’Ariccia, G 25 Delors, J 82 Delors Report (Commission) (1989) 2, 79 Delsen, L 118 democratic deficit 77, 79–81, 83 Denmark 102–3, 112, 123 deposit insurance (guarantee) 4, 36, 38, 43 deposit-taking 36, 38, 47 De Resende, C 125 devaluation (currency) 103, 122, 180 devaluation (internal/wage) 112, 146–9, 180 Dévoluy, M 153 Devries, P 133 Díez, J.C 103, 113 Directorate-General for Economic and Financial Affairs at the European Commission 94 discretional fiscal policy 16, 18, 22, 25, 54, 59, 61, 123, 133 Dodd-Frank Act 3, 43–7 Domenech, R 98 Donges, J.B 106 double-dip (recession) 115, 126, 128, 132 Dourille-Feer, E 153 Draghi, M 7, 79, 90, 151, 172 Duménil, G 153 Eastern Europe 73–8 ECOFIN 81, 114, 115, 121, 122, 143 Economic and Financial Committee (European Commission) 98 economic policy objective 2–3, 53–6, 59, 66 economic policy strategy/paradigm 4, 56 effective demand 8, 20–1, 59, 108, 114, 116–19, 123–5, 128, 145–9 Eichengreen, B 19, 22 Elster, J 16 Engelen, E 18 enlargement process (European Union) 70–6, 99 Enzenberger, H.M 80 Erceg, C.J 125 Ertürk, I 18 198 Index Escolano, R Estonia 112, 168 European Bank Authority (EBA) 35–8, 109 European Bank for Reconstruction and Development (EBRD) 50 European Central Bank (ECB) 2, 6–7, 9, 21–2, 26–7, 35–7, 47–8, 55, 57, 59–64, 67–8, 80–1, 86, 96, 100, 105–10, 136, 141–2, 148, 150–2, 157–8, 161, 164–5, 172, 174, 176, 178, 181 European Commission 4, 9, 35, 37–8, 48, 50–1, 57–8, 63–5, 71–2, 75–6, 79, 81–2, 86, 95, 97–8, 103, 110–12, 114–15, 124–8, 130, 132, 140, 143, 154, 171 European Constitution (draft treaty for a) 71–5, 81–2 European Convention 71, 73, 82, 90 European Council 37, 50–1, 69, 70–1, 80, 86, 94, 97–8, 112, 132, 142–4 European economic governance 2, 7, 8, 87, 136, 143, 153 European Financial Stabilisation Mechanism (EFSM) 63–4 European Financial Stability Facility (EFSF) 64 European Investment Bank (EIB) European Parliament 4, 35, 71, 86, 111, 133 European Stability Mechanism (ESM) 64, 86 Europisation 5, 135 EUROSTAT 102, 103, 112, 133 Eurozone 1–9, 16, 19–23, 26–8, 52–3, 56–7, 59–68, 82, 86, 93–4, 98–9, 103, 105–6, 108, 111–12, 115, 136, 141, 143, 146–52, 155–60, 162, 164–5, 171–2, 174–7, 180–1 Excessive Deficit Procedure (EDP) 58 Excessive Imbalance procedure (EIP) 58 exchange rates (policy) 1, 7, 93, 97, 112, 137–8, 146, 148–9, 158, 180 exit strategy 4–5, 94, 99, 108–10 expansive austerity 4, 20–1, 110, 115, 120, 121, 123, 124, 131, 133 expenditure benchmarks 57 external trade imbalance Fama, E.F 118 Federal Europe 5, 74 Federal Reserve (US) 6, 19, 22, 42, 44–6, 86, 108, 125, 158, 161–2, 164–5 feedback between interest rates and debt accumulation 170 feeling of belonging to the EU Ferguson, N 74, 90 Ferraris, V.L 88–90 Financial Crisis Inquiry Commission Financial Services Authority (FSA) Financial Policy Committee (Bank of England) 39–40 Financial Stability Board (FSB) 31, 50–1 financial stability/instability 34, 36, 38, 39, 40, 41, 43, 46, 48, 53, 55, 62 Finland 7, 36, 102–3, 106, 112, 147, 168 fiscal adjustment 9, 121, 122, 124, 148 fiscal consolidation 4, 7, 8, 32, 44, 124, 125, 126, 127, 128, 130 fiscal union 2, 49, 86 Fischer, J 81, 85, 90 Fisher, J 114 Fitoussi, J.P 79, 82, 90, 154 flight to quality 175 Forder, J 16 forecast errors 125, 126, 127, 128, 129, 132, 133 Forget, J 154 Fouchet plans 78–9 France 14, 29, 59, 61, 65, 72, 81, 102–3, 113, 127, 145, 147–8, 156, 159, 162, 168, 175–8 Freedman, C 125 Friedman, M 52 Froud, J 18 Furceri, D 125 Gagna, É 153 Galbraith, J.K 29 Galli della Loggia, E 83, 90 game theory García-Durán, P García, J.A 55 García, P 94 Garrett-Peltier, H 119 Germany 7, 20–1, 29, 59, 61, 65, 74, 76, 78, 81, 89, 102, 103, 106, 110, 112–13, 127, 134–6, 141–3, 145–52, 156, 162, 168–72, 175–81 Ghosh, A 28 Giannone, D 61 Giddens, A 72–5, 90 Giscard d’Estaing, V 71, 90 Glass-Steagall Act 43 golden straitjacket 14–18 golden straitjacket, limits 23–9 Goodfriend, M 54 Gordo, E 94 Index 199 Gorodnichenko, Y 21 Governing Council of the European Central Bank 37, 57 government debt yields 156 Graña, F 95 Gravet, I 137 Great Moderation 52 Great Recession 13–14, 19, 24, 29, 52 Gréau, J.L 154 Greece 64, 79–80, 101–5, 112–16, 119, 127–9, 131, 133, 147, 156, 165, 167–71, 175–7 Groß, H 118 Guajardo, J 123, 133 Gual, J 112 Habermas, J 18 Habermeier, K 28 Harmonised Index of Consumer Prices (HICP) 59 Harribey, J.M 153 Heintz, J 119 Herdnon, T 107–8 Hirschman, A.O 15 HM Treasury 38–41, 51 Hollande, F 77, 90 home bias 33, 47 Hungary 77 Husson, M 153 Independent Commission on Banking chaired by Sir John Vickers 39, 51 index of financial fragmentation 156 informational asymmetries 179 interbank market 57 interconnectedness 32, 47, 49 interest payment over GDP 171 interest rate (level/policy) 1, 6, 18, 22, 52, 54–7, 60, 93, 100, 106, 108–9, 117, 118, 167, 170–2 interest rate differentials 165, 179 intergovernmental approach (for EU construction) 7, 74, 81, 86, 96, 99 International Monetary Fund (IMF) 6, 8, 9, 123, 125, 127, 131 Ireland 20, 63–4, 101–5, 111–12, 114, 116, 119, 122, 123, 127, 129, 147, 156, 162–3, 168–71, 175–7 Italy 81, 102, 112–13, 115–16, 119, 127, 147–8, 151, 156, 167–71, 175–8 Iyanatul, I 122–3 Jamet, J.F 147, 153 Janssen, R 154 Japan 5, 6, 14, 21, 23, 26, 137, 158–60 Jayadev, A 122 Jeanne, O 156, 158–9, 164 Jeffers, E 153 Jickling, M 45, 51 Ji, Y 7, 120 Johal, S 18 Jorgensen, H 130 Justo, I 114 Kalecki, M 131 Khalfa, P 153 Kehoe, P.J 15 Keynes, J 117, 120, 122 Kindleberger, C.P 17 King, L 132 Kinsella, S 123 Kitson, M 132 Klaus, V 78 Kollewe, J 132 Konczal, M 122 Konzelmann, S 132 Krugman, P 23 Kumhof, M 125 Kunstein, T 90 Kushmeider, R.M 42 labour costs 101, 103, 147 labour market 97, 131–5, 143, 148–9 labour mobility 2, 99, 112 Lalonde, R 12 Lang, D 144, 153–4 Laxton, D 125 leadership Leaver, A 18 Le Bayon, S 144 Leigh, D 123, 133 lender of last resort (function) 21–2, 93, 137, 150–2, 156, 164, 172, 181 Lenza, M 61 Lévy, D 153 Liikanen, E 36, 47 Lindé, J 125 Lithuania 78 Llorente, R 118 Longo, F 95 Lucas, R.E 17–18 Lumsdaine, R.L 61 Luxembourg 102–3, 168 McKee, M 133 McKinsey Global Institute 14, 27 Macroeconomic Imbalance Procedure (MIP) 58, 62, 67, 98, 146 200 Index macroprudential 3, 34, 35, 37, 39, 40, 44, 48–9 Mafféi, B 154 Malo de Molina, J.L 100, 112 Malta 168 Mariscal, N 97 market volatility 155 Marks, G 96 Marshall Plan 74 Masciandaro, D 50 Math, A 153 Mauro, P 25 Mazower, M 90 Memorandum of Understanding (MoU) 9, 33, 38, 41, 47, 51, 64–5 Millet, D 154 Millet, M Mishkin, F.S 55, 63 mispricing in sovereign debt markets 172 Monnet, J 81 monetary policy 54, 55, 56, 118–19, 122, 125–6, 135, 137, 140, 150–2, 164, 181 Monetary Union Index of Consumer Prices (MUICP) 57, 59 moral hazard 8, 33, 46, 105–6, 110, 167 Moran, M 18 Moravcsik, A 75, 90 Morin, E 85, 90 Mourougane, A 125 Muir, D 125 multipliers 121, 124, 125, 126, 127, 128, 130, 133 multi-speed Europe 81–3 multivariate model for the fiscal multiplier 167 Mundell, R 148, 154 Muñoz de Bustillo, R 118 Murphy, E.V 45, 51 Mursula, S 125 mutualisation of sovereign debt (Eurobonds/Stability bonds) 6, 109, 112, 142–6 mythological approach to the European Union process 72, 83 national sovereignty 14, 75–83, 141 Netherlands 7, 61, 72, 102–3, 112, 126–7, 147, 156, 168 Noguer, M 112 Nolkë, A 112 non-performing loan ratios 177 Offe, C 80, 90 Ontiveros, E 104, 153 Optimum/Non optimum monetary (currency) area (OMA) 4, 9, 93, 99, 136–7, 139, 152 Orellana, R 95 Organization for Economic Cooperation and Development (OECD) 5, 74, 108, 115–16, 123, 125, 133, 135 O’Rourke, K 19 Orphanides, A 56 Ostry, J.D 28 Output gap 54 Outright Monetary Transactions (OMT) 6, 22, 26, 156, 172, 174 Padoa Schioppa, T 79–80 Palley, T I Persson, T 15 Pescatori, A 123, 133 phillips curve 52 Pisani, F 137, 153 Pisani-Ferry, J 8–9, 138, 153–4 Plihon, D 153 Poland 78, 132 Pollin, R 107–8, 119 Ponticelli, J 29 Portugal 20, 63–4, 101–3, 105, 112–16, 126–9, 147, 156, 168–71, 175–7 Potential output 54, 60 Prasad, E.S 61 price/wage flexibility 2, 112, 148 Prodi, R 71, 75, 81, 90 quantitative easing 6, 22, 105 Quiggin, J 117, 122 Quintyn, M 50 Radaelli, C.M 95 Rajan, R.G 29 Ramonet, I 153 recession 1, 114, 115, 117, 118, 120, 122, 123, 124, 126, 128, 130 regulation 137, 138 Reichlin, I 61 Reinhart, C.M 17, 50, 107 Reinhartd, D 28 Ricardo, D 119 Roberts, J 125 Rodríguez, D 55 Rodríguez-Ortiz, F 107, 153 Rodrik, D 138, 152–4 Roeger, W 125 Rogoff, K.S 17, 50, 107 Romania 101–2 Romer, C 19 Index 201 Rosanvallon, P 83, 90 rules versus discretion 16, 26 Russia 78 Sapir, J 144, 154 Say, J.B 117, 133 Scheller, H.K 50 Schindler, M 125 Schmidt, H 75, 83, 90 Securities and Exchange Commission (SEC) (US) 15, 43, 45 Sen, A 18, 29 shadow banking 32, 47 Shambaugh, J.C 167–8 Single Supervisory Mechanism 3, 57 Skidelsky, R 18 Slovakia 77, 78, 112, 168 Slovenia 77, 112, 115, 168 Snudden, S 125 solvency/insolvency 33, 34, 44, 46 Sotelo, I 135, 156 Southern Europe/EU periphery countries 8–9, 20, 61, 101–11, 138, 143, 146–9 sovereign debt (crisis) 2, 5, 6, 9, 134, 139, 145, 150, 152 Spain 5, 14, 19–20, 65, 101–5, 109, 111–13, 114, 116, 119, 126–30, 140–1, 147–8, 151, 156, 159, 162–3, 167–71, 175–80 Spilimbergo, A 29, 125 spread (sovereign debt) 6–7, 15, 23–4, 105–6, 120, 137–8, 152, 157–8, 170, 172–3, 179–80 Stability and Growth Pact (SGP) 1, 57, 60, 86, 87, 115 Steinberg, F Sterdyniak, H 144, 153–4 Stiglitz, J 23, 27, 29, 138, 153 Strange, S structural deficit 54, 97, 145 structural power structural reforms 8, 21, 39, 98, 100, 143 Stuckler, D.133 Suhrcke, M 133 Svensson, L.E.O 53, 55–6 Sweden 102–3, 127, 163 Switzerland 127 Symansky, S 29, 125 systemic risk 35, 39, 40, 41, 46, 48 Tabellini, G 15 taxation system/policy 89, 93, 97, 101, 104, 111, 140, 144 tax avoidance/havens/competition 8, 111 technocratic management 23, 80–3 Timbeau, X 137, 153 too-big-to-fail 33, 34, 49 Toribio, J.J 112 Toussaint, É 154 Trabandt, M 125 trade-offs between objectives 27 Treaty of European Union (TUE) 2, 84 Treaty of Lisbon (Lisbon Treaty) 72, 78, 84, 87–8 Treaty of Maastricht (Maastricht Treaty) 86–7, 94, 111 Treaty of Rome (officially the Treaty establishing the European Economic Community) 97 Treaty on Stability, Coordination and Governance (TSCG) 1, 86, 97, 128, 144 Treaty on the Functioning of the European Union (TFEU) 6, 37, 50, 58, 84, 98, 107 Tremonti, G 81, 90 Van Rompuy, H 82, 90, 94 Vega Pansini, R 50 Veld, J 125 Vickers 39, 47 Volcker 44, 47 Voth, H.J 29 United Kingdom (UK) 1, 3, 5, 14, 19, 21, 31, 38–42, 47–9, 102, 105, 116, 119, 127, 137, 141, 158–60, 170 United States (USA) 3, 5, 14, 16, 19, 21–3, 28, 31, 42, 45, 76, 108, 115–16, 155, 166 Walesa, L 78 Watt, A 98 Weidmann, J 106 Weiler, J.H.H 80, 90 Weisbrot, M 130 welfare State 20, 87–9, 132, 135, 148 Wessels, W 90 Wicks-Lim, J 119 Wieland, V 56 Wilkinson, F 132 Williams, K 18 Wolff, G.B 8–9 Yellen, J.L 53, 55 Zandi, M 19 ... Janneke Plantenga and Mark Smith 28 The Economic Crisis and Governance in the European Union A critical assessment Edited by Javier Bilbao-Ubillos The Economic Crisis and Governance in the European. .. ARGIMóN, MAR A LUISA LEYvA AND CRISTINA LUNA The Eurozone, challenging the institutional framework for economic policy 52 RICARDO ALáEz-ALLER AND CARLOS GIL-CANALETA Why so slow? The crisis and. .. British Library Library of Congress Cataloging in Publication Data The economic crisis and governance in the European Union: a critical assessment / edited by Javier Bilbao-Ubillos pages cm Includes