This work examines the political economy of exchange-rate policies in the eastward expansion of the eurozone. Analysis shows that prospective members of the EMU are likely to pass on some costs of convergence to the current EMU members. The mechanism is an altered exchange-rate policy that utilizes a "threaten-thy-neighbour" strategy. This could ensure a stabilization of the CEECs' convergence toward the EMU, and a successful eastward enlargement of the eurozone.
This book seeks to analyse the development of the European Union (EU), which was founded upon the principle of the free movement of capital, goods, services and people in 1957. Its central thesis is that, from a practical and theoretical point of view, such a basis is fundamentally at odds with the creation of an interventionist regime that the construction of a social Europe would require. The authors argue convincingly that - economically: the EU does not currently possess the budget or the economic tools to pursue such a strategy; politically: close to none of the institutions of the EU have backed such a policy; practically: conservative and neo-liberal forces (among member states and the institutions of the EU) have repeatedly thwarted any moves in this direction. In reality, the Single Internal Market, Economic and Monetary Union, enlargement, the Lisbon Agenda and European Constitution projects all prioritise supply-side measures and expanding the scope of the market rather than the boosting of demand and other economic intervention. Consequently, constructing a social Europe in the face of this would appear problematic. Hence, in both theory and practice, the idea that there can be a social Europe vis-à-vis neoliberalisation is a contradiction in terms. This controversial book will be an educating and refreshing read for advanced students and academics involved with European politics, the European Union, European Economics and Economic instititutions.
This work examines the political economy of exchange-rate policies in the eastward expansion of the eurozone. Analysis shows that prospective members of the EMU are likely to pass on some costs of convergence to the current EMU members. The mechanism is an altered exchange-rate policy that utilizes a "threaten-thy-neighbour" strategy. This could ensure a stabilization of the CEECs' convergence toward the EMU, and a successful eastward enlargement of the eurozone.
Creating the European monetary union between diverse and unequal nation states is arguably one of the biggest social experiments in history. This book offers an explanation of how the euro experiment came about and was sustained despite a severe crisis, and provides a comparison with the monetary-financial history of the US. The euro experiment can be understood as risk-sharing through a currency that is issued by a supranational central bank. A single currency shares liquidity risks by creating larger markets for all financial assets. A single monetary policy responds to business cycles in the currency area as a whole rather than managing the path of one dominant economy. Mechanisms of risk-sharing become institutions of monetary solidarity if they are consciously maintained, but they will periodically face opposition in member states. This book argues that diversity of membership is not an economic obstacle to the success of the euro, as diversity increases the potential gains from risk sharing. But political cooperation is needed to realize this potential, and such cooperation is up against collective action problems which become more intractable as the parties become more diverse. Hence, risk-sharing usually comes about as a collective by-product of national incentives. This political-economic tension can explain why the gains from risk-sharing are not more fully exploited, both in the euro area and in the US dollar area. This approach to monetary integration is based on the theory of collective action when hierarchy is not available as a solution to inter-state cooperation. The theory originates with Keohane and Ostrom (1995) and it is applied in this book, taking into account the latest research on the inherent instability of financial market integration.
This extensive Handbook provides an in-depth exploration of the political economy dynamics associated with the international monetary and financial systems. Leading experts offer a fresh take on research into the interaction between system structure, t
The European Union’s (EU) membership conditionality has been perceived as a highly effective means of influence on non-member states in the run-up to the 2004 and 2007 enlargements. According to the incentive-based explanation that dominates the literature, conditionality has been particularly effective when the EU offered a credible membership incentive and when governments did not consider the domestic costs of compliance threatening to their hold on power. This volume challenges much of the existing work on EU enlargement and postcommunist transition, however, by testing the conditionality thesis in the post-accession setting. Whereas a conditionality hypothesis would predict deteriorating compliance among the newest member states, several contributions here actually find the opposite. Enduring compliance among postcommunist states with the acquis, as well as with less formally institutionalized EU preferences for economic liberalization and minority protection, calls into question the role that conditionality plays in eliciting conformity. Simultaneously, support for the conditionality hypothesis in areas such as political party development and EU relations with Turkey and the western Balkans suggests conditionality’s effects vary across countries and issues. As the first study to systematically examine the relationship between international institutions and postcommunist states after enlargement, this volume provides new insights into how external actors exercise their power in domestic politics. This book was published as a special issue of the Journal of European Public Policy.
The idea for this volume came from the enigma that some Central and Eastern European (CEE) European Union (EU) member states have been keen to join the Eurozone while others have shown persistent reluctance. Moreover, the attitudes towards joining have seemingly not correlated with either the level of economic development or the time spent as part of the EU, nor with any other rational reason such as the level of integration into the EU real economy, or the level of trust in the EU on the part of the public. Therefore, at first sight, the answer to the question ‘why in, why out?’ remains rather unclear. The attractiveness of the currency union has nevertheless not disappeared for the CEE countries. Despite the Eurozone crisis of 2010–13, it was during that time that the Baltic states introduced the euro. Then, after a few years of inactivity, Croatia and Bulgaria successfully applied for membership of the exchange rate mechanism in July 2020, amid the economic crisis caused by the coronavirus (COVID-19) pandemic. At the same time, the three Visegrad countries still using their national currencies – Poland, Czechia and Hungary – no longer have a target date to join the monetary union. This volume aims to discuss these issues from horizontal aspects and through country studies, with contributions from expert authors from, or closely related to, the CEE region.
The European political economy: policy and theory, provides students, researchers and policy makers with a profound understanding of the theory and policy of the EU. The book covers in a comprehensive way the key issue areas of the European Union activity and it includes an analysis of all the important current developments in Europe such as the Brexit, the European Union sovereign debt crisis, the European economic governance problems and the macroeconomic adjustment challenges within Eurozone. The book also includes critical resources for readers and students such as review questions, appendixes, references and further reading lists. More specifically, the textbook explains thoroughly the institutional, economic and policy characteristics of the fundamental issue areas of European economy. It outlines the institutions and mechanisms of European union/Eurozone, the common agricultural, regional and trade policies, the impact of the single market and the single currency on European economy, the enlargement process and the key questions on the European macroeconomic adjustment process. In each chapter the book explains not only what is taking place in European economy but also which the feasible options of the European policy agenda are. The textbook enables readers to apply conceptual and theoretical knowledge to economic and political processes of European integration.
Where is Europe going? In this 2007 collection, several prominent European economists offer essays on the five big challenges to the development of the European Union (EU). Namely, the new European Constitution, European finances and the euro, the need to boost economic growth, competition in both new member states and countries further to the East, and the goal of forming a cooperative and productive relationship with countries on the European periphery. The book includes essays by Charles Wyplosz, who argues that enlargement and deepening are not substitutes but complements; Vito Tanzi who questions the Keynesian foundation of the Growth and Stability Pact; Daniel Gros, who criticises the achievements within the Lisbon Agenda, as well as essays by Anders Aslund, who claims that Russian and Ukrainian oligarchs differ little from US 'robber barons'. The final two chapters discuss the EU's European Neighbourhood Policy and long-term economic integration in Eurasia. Listed in the Economist Top 100 Books of 2007.
