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Questo articolo è stato pubblicato il 01 ottobre 2010 alle ore 14:03.
COPENHAGEN – Europe’s sovereign-debt problems have prompted a search for more effective approaches to economic governance in the European Union, particularly in the euro area. Having mounted exceptional efforts, first to provide financing for Greece’s adjustment program, and then to create a safety net for other distressed countries, the European Council established a task force, chaired by President Herman van Rompuy and composed largely of EU finance ministers, to make proposals for reform.
The van Rompuy Task Force will submit its final report in October, but we can anticipate its conclusions in the light of the current system’s major shortcomings.
At the euro’s planning stage, most observers fell into two camps. Some believed that the absence of political union – reflected in the euro’s lopsided design, which centralized monetary authority but left budgetary and other economic policies (largely) in national hands – would ensure the common currency’s failure. Others believed that the euro itself would trigger political unification.
Neither view has come close to reality so far – and it remains unclear whether the current proposals will settle the issue, in particular by clarifying what elements of political union are essential for the euro’s survival.
In retrospect, then, the euro appears to have been a hazardous experiment. But the decision to move towards monetary union reflected what seemed most urgent and politically possible at the time: elimination of intra-EU exchange-rate instability, which had dominated the policy agenda for decades.
There was no support for centralizing any significant elements of fiscal policy – nor is there today. But such a transfer of authority was not seen back then as necessary for monetary union to work.
Instead, the euro’s founders believed that exposure to deeply integrated markets for goods and services and a tough competition regime would keep national price and cost trends broadly in line, and that common and simple fiscal rules would prevent individual countries’ budgetary behavior from deviating strongly. The fiscal rules, later elaborated into the Stability and Growth Pact, are in themselves elements of a political union.
The original vision was that this set-up would help to assure a growth-friendly policy mix, with fiscal prudence keeping interest rates low on average. This approach was chosen not only because of political expediency; indirect coordination was seen as economically superior to the more direct coordination implied by economic governance.