Monday, 17 May 2010

Defence of economic and monetary union (EMU): Fundamental and trivial questions

We have seen that the heads of state or government of the euro area and the Economic and Financial Affairs Council (ECOFIN) have outlined or decided on exceptional measures to defend the economic and monetary union (EMU), with new steps to be discussed when the Euro Group meets later today and the ECOFIN Council tomorrow, 18 May 2010.

The sums of the pledges thrown into the battle, essentially by EU member states’ governments, are astronomical and the events have unfolded at a breakneck pace. Despite this, the emergency measures have resuscitated the patient, not solved the underlying health problems.

Calls for fiscal stability and structural reforms, if put into practice, will affect the lives of 500 million EU citizens.

We can rest assured that the national political leaders and finance ministers have acted for the people, as they see it, but it still leaves an awful lot of questions about the contents, rules and practices, transparency and democratic government.

As the events keep unfolding, what are stakeholders, if diligent, able to patch together with regard to the decisions taken and the measures proposed?

Besides the (intergovernmental) Council and the European Central Bank (ECB) as the monetary pillar of EMU, what is the role of the other EU institutions, the European Commission and the European Parliament?

How about the role and positions of individual governments and national parliaments?

What, if anything, has been left for democratic debate and decision making at EU and national level?

How do the rules on economic policy under the Lisbon Treaty cope with these unprecedented challenges?

The economic policies of the EU member states have undoubtedly become common concerns for more than the respective governments.

From existential questions to trivial details, there is much to look at if we want to make some sense out of the torrent of media reports and comments.

Ralf Grahn