Posted by: Dirk | April 6, 2009

The EMU at 10

There is a new book out by David Marsh called The Euro – The Politics of the New Global Currency (see here). The author points out the problems of macroeconomic adjustment and the role played by Germany so far:

The negative interpretation of the Euro’s speedily-won status is that pride goes before a fall. Rather than catalysing European renewal, the Euro is holding back Europe’s efforts to repair its position in a world where economic dynamism is migrating to America and Asia. Still worse, emerging divisions threaten the fifty-year-old process of post-Second World War European unification. EMU economies – although growing together in many ways – display wide and sometimes increasing imbalances.At the heart of the matter is Germany, Europe’s strongest economy, which by 2008 had substantially (though not wholly) recovered from the trials of reunification eighteen years previously. Fixed European exchange rates provide disproportionate support for Germany’s export-orientated economy by making its industrial sales extremely competitive throughout most of Europe, increasing Germany’s export surplus to record levels,and deflecting its attention from the necessary task of stimulating domestic demand – an outcome that would help both itself and its neighbours.

This might make an interesting read. (The first 6 pages are available as a preview on the web, the link is given above.) This semester, I will participate in a joint seminar with the Jean Monet Center for Europeanisation and Transnational Regulation Oldenburg (CETRO) on this and related questions. During our excursion to Brussels we will meet and discuss with policy makers. (Sorry dear students, all places are already filled by now.)

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Responses

  1. Much has been said and written about the EMU but I think the problem is that few people really understand what it is and how it works.
    Perhaps we could have a book to explain it in terms ordinary people can understand

  2. Since I give a lecture on this issue on April 20th to a lecture with is attended by sociology students, the talk should be comprehesible without too much prior knowledge of economics. It could be interesting for you, so I will make my slides available here afterwards.

    (UPDATE: I taught the lecture in German, sorry! Maybe I can comment on the eurozone next week.)


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