Can a monetary union survive without centralised financial supervision? Can it survive without a strong central fiscal authority? These are key questions for EMU going forward. Two articles in the FT advance the debate by pointing to two very different types of spillover that would seem to imply a need for collective action.
5 replies on “Spillovers”
[…] This is what Lisbon and "ever closer union" is all about. Discussed today below. The Irish Economy Blog Archive Spillovers So much for the union of independent states with free movement, free trade, etc envisaged in the […]
The Germany article is interesting (re constitutional near-zero cap on deficits) in that it probably serves well to highlight the cultural differences in financial markets within the EU.
How can there be a pan-European regulator when some of the countries being regulated see debt as the root of all evil (Germany) and others have become so used to it as an investment tool that they would be unable to do business without it (Ireland etc.)?
Pan-European regulation is an important pillar of the EMU, but the cultural obstacles it will have to overcome make it unlikely in the shorter term.
I agree,
Is this then a sign that maybe Lisbon would not work in the long run and that an attempt to “level the playing field” within the E.U does in fact, completely evade the topic of cultural divides?
I think that conflict will be a stronghold with an overall regulator, a guarantee in fact.
[…] This is what Lisbon and "ever closer union" is all about. Discussed today below. The Irish Economy Blog Archive Spillovers So much for the union of independent states with free movement, free trade, etc envisaged in the […]
It is a sign that some people learn from history and others do not!
Thomas Jefferson had much to say on the subject of banks undermining countries.
The whole reason we joined the Euro was the stability. Ahhh! The stability! A stable currency because banks were regulated and laws are obeyed.
You are right, Ireland has no business being in the EU!