The Economic and Monetary Union of Europe is currently under pressure. As the dust of the financial crisis is currently setting, Greece saw a hard-left swing of the government in the beginning of...Show moreThe Economic and Monetary Union of Europe is currently under pressure. As the dust of the financial crisis is currently setting, Greece saw a hard-left swing of the government in the beginning of 2015, winning on the back of an anti-austerity campaign. Greece is currently trying to find a consensus on the payback of lending’s with the troika, representing a group bailout creditors consisting of the ECB, the European Commission and the IMF, but it is not the only euro country facing economic difficulties. Since the launch of the single European currency, mutual fiscal performances have been mixed. In order to impose fiscal discipline on the Eurozone candidates, the Stability and Growth Pact (SGP) was implemented in 1997, reflecting a full set of fiscal rules and several monitoring- and correction mechanisms on a supranational level. However, after two rounds of reforms in 2003-2005 and 2010-2011, scepticism prevails. The latest reforms continue to reflect an unwillingness of member states to transfer the necessary degree of sovereignty over macro-fiscal objectives to the European level mirroring the need of further political integration. While these observations helps put the current tensions into perspective, they cannot explain why member states have been showing mixed results while being subjected to the same external constraints. This research will try to seek answers to this question. Where problems occur on a supranational level due to the lack of political integration, there is a need for increased monitoring on a national level. The Economic and Monetary Union of Europe is in essence a two-way relationship. In the end, the increased fiscal imbalances in the euro area as a whole and the current critical situation in some of the member states, risk undermining stability, growth and employment, as well as the sustainability of the EMU itself.Show less
The creation of the Economic and monetary union seemed to be a success until the outbreak of the severe Eurozone crisis in 2008. The Treaty of Maastricht did not foresee a possible outbreak of the...Show moreThe creation of the Economic and monetary union seemed to be a success until the outbreak of the severe Eurozone crisis in 2008. The Treaty of Maastricht did not foresee a possible outbreak of the this type of crisis: a financial crisis, a sovereign debt crisis and a severe economic crisis – all in one. The design of the Treaty of Maastricht contained four big design failures. Firstly, the Treaty proved to be too intergovernmental. Secondly, the Treaty did not contain a banking union, and left supervision of the financial system to the national surveillance bodies. In addition, the drafters did not take into account macro-economic imbalances and mainly focused on deficit spending of the Member States. And last but not least, the Treaty lacked crisis management and tools in order to ‘rescue’ the common currency, in case thing would go wrong. This thesis is about the question to what extent the Dutch government could know of foresee these problems in the period between Single European Act and the Maastricht Treaty, 1985-1991. The research elaborates on three questions. First: were the design failures already part of academic literature and discussion at the time of the Treaty of Maastricht? The second parts elaborates on the advisory boards of the government: what did these boards advice regarding the design failure issues? The last part is about the statements of the Dutch government. The overall conclusion is that the Dutch government did ignore most of the warnings of the academic literature and the advises of the advisory boards. But in fact, it seemed that the Dutch government could not predict the outbreak of the Eurozone crisis.Show less
European monetary integration has come a long way since the establishment of the Rome Treaty in 1957. Subject to this paper is the influence of the German unification on the establishment of EMU....Show moreEuropean monetary integration has come a long way since the establishment of the Rome Treaty in 1957. Subject to this paper is the influence of the German unification on the establishment of EMU. Key-literature on the subject varies a great deal in perspective. Some claim that EMU is the direct result of national political-economic preferences, while others argue that without the prospect of German unification there would have been no such thing as a European monetary union. Most authors seem determined in taking one particular point of view, favoring either national political-economic or geopolitical preferences. On the basis of two hypotheses, a study of key-scientific publications (Moravcsik, 1998; Staal, 1999; Baun, 1995 and Sandholtz, 1993) and a situational analysis involving the EMS period, the EMU negotiation process and the period after Maastricht, this paper discusses the probability if the negotiations on EMU would have reached a deadlock without the prospect of German unification or if EMU would have been established also without this prospect, while it was a direct result of Franco-German national political-economic considerations.Show less
Based on the legal base of the SSM, Council Regulation (EU) no 1024/2013 and a literature overview, this thesis will approach the main question: Is there a need to change accountability practices...Show moreBased on the legal base of the SSM, Council Regulation (EU) no 1024/2013 and a literature overview, this thesis will approach the main question: Is there a need to change accountability practices of the ECB now that it has new tasks regarding prudential supervision? This new Single Supervisory Mechanism (SSM) will divide the European Central Bank (ECB) tasks into a monetary function and a supervisory function. Hereby the ECB and the national central banks (NCBs) of all Member States of the euro zone form the European System of Central Banks (ESCB). The debate involving the ECB independence and its new integrated supervisory tasks alongside monetary policy raises a number of questions. This particularly relates to central bank independence, since the possibility of trade-offs between monetary policy and supervisory tasks could lead to conflicts of objectives. Hence, reputational risks are significant challenges and threats, which need to be overcome. Moreover, when executing the two tasks during crisis situations within the euro zone, the ECB must have a high incentive to improve its accountability practise towards the European public to strengthen its credibility. Therefore, the existing accountability framework of the ECB must be critically reviewed. Thus the ECB could take certain extra measures to maintain its high standard of accountability.Show less
