UNDERSTANDING EMU ASYMMETRIES AND THEIR ECONOMIC AND POLITICAL IMPLICATIONS

Sara Casagrande

doi:10.35774/jee2021.01.069

Abstract

The Covid-19 emergency makes the seriousness of the unsolved political and economic issues that emerged during the European sovereign debt crisis even more evident. Today more than ever it is necessary to answer questions related to the fragility of the EMU architecture: why was the EMU created with an asymmetric structure? What was the role of EMU architecture and European policies during the crisis? Do EMU asymmetries threaten the survival of the Eurozone? The European integration process took place on the basis of a permissive consensus determined by the expectation of successful economic outcomes, without a true democratic legitimacy. Under such conditions, a fiscal and political union was not possible. The EMU proved to be a competitive arena, within which economic and political asymmetries were difficult to manage. An analysis of these asymmetries allows conclusions to be drawn regarding the risks associated with further economic and institutional integration.

Highlights

The Covid-19 emergency makes the seriousness of the unsolved political and economic issues that emerged during the European sovereign debt crisis even more evident
This paper suggests that the current situation is the result of unsolved political and economic problems related to the fragility of the asymmetrical Economic and Monetary Union (EMU) architecture
The most controversial aspects of EMU asymmetries will be discussed in this paper via three questions: why was the EMU created with an asymmetric structure? What was the role of EMU architecture and European policies during the crisis? Do EMU asymmetries threaten the survival of the Eurozone? Clear answers to these questions are an essential prerequisite for understanding how to proceed with the integration process after the Covid-19 emergency, and the risks associated with further economic and institutional integration

Summary

Introduction

The Covid-19 emergency makes the seriousness of the unsolved political and economic issues that emerged during the European sovereign debt crisis even more evident. The absence of true democratic legitimacy, the consensus based on economic results and the competitive attitude of the member countries played a fundamental role in the process of European integration, favouring the adoption of the single currency albeit within an unstable architecture, and no member country was yet willing to converge towards a political union, at least in the short term.

Results

Conclusion