Is There an Alternative to the Present Model of Economic Governance of the Eurozone?

Abstract

The article by Collignon (2013) discusses some problems of the present state of monetary integration in Europe - efficiency of economic governance under the Stability and Growth Pact (SGP) and a democratic legitimacy of the European institutions. In such a problem setting, common macroeconomic management produces some externalities resulting in suboptimal effects at the EU level, while 'democratic deficit' reduces efficiency of the economic governance and provokes reluctance to common actions (policies) among the EU citizens. Although the article correctly points out the main problems of the eurozone, it offers no different approach to solving the current problems of its governance, other than the topics already marked on the European integration agenda such as creating a bank union and a federalist model of political governance. By analysing the relevance of the current model of economic governance of the eurozone in a historical perspective of the European integration, this response article takes a more milder view of the current model of economic governance of the eurozone and suggests individually tailored integration dynamics which would allow the member countries to keep their own economic policy priorities, while enabling the EU to preserve a coherence among the countries at the same level of integration.