Periodic Reporting for period 2 - EURECON (The Making of a Lopsided Union: Economic Integration in the European Economic Community, 1957-1992)
Reporting period: 2018-09-01 to 2020-02-29
The project investigates European policymakers’ views about how to make the European Economic Community (EEC) fit for a monetary union. It assesses the origins of the issues that are currently bedevilling the EU. From the EEC creation in 1957 to the decision to create the euro in 1992, several proposals were tabled to improve the functioning of the EEC as a possible currency area. Five interconnected domains are crucial to achieve economic integration in a currency union, and were continuously discussed before 1992: macroeconomic policy coordination, fiscal transfers, capital market integration, banking regulation, and deepening of the common/single market. The project will provide the first historical appraisal of these proposals and debates, and identify the dynamics of political and economic trade-offs and compromises, shifting priorities, and alternative approaches abandoned at the time but recycled later. The project also encourages the study of the critical influence of non-EEC and non-state actors and factors on the European decision-making level. To this end, the PI leads a team of two PhD students and two Postdocs exploring specific case studies involving commercial banks, big business, trade unions and the evolution of economic thinking.
Why is it important for society?
The project contextualises the current policy debates in the Eurozone and sheds light on the post-Maastricht evolution of the EU thanks to a greater understanding of its foundations. The shortcomings of the current system suggest that the analysis of how these structures were established and of the reasons for the choices made by European policymakers at the time will give fresh perspective to future options in this major policy area.
What are the overall objectives?
The project’s main objective is to arrive at a systemic analysis linking the five strands of economic integration - macroeconomic policy coordination, fiscal transfers, capital market integration, banking regulation, and deepening of the common/single market - in the EEC, and how this economic integration was connected to the possible creation of a single currency. While the focus of the analysis is mainly on the decision-making process in Brussels and the debates between individual member states’ governments, the project also takes into consideration non-state actors. This research takes the form of specific case studies in the following four areas: commercial banks, big business, trade unions and the evolution of economic thinking.
It is difficult to talk about main results at this stage as this is still a work in progress. But generally speaking the research -- whether by team members or the PI -- confirms the potential of the project. Two journal articles have been submitted, one journal article accepted, one book proposal submitted. The PI made presentations on two important aspects related to EMU debates: the creation of a European-wide deposit insurance scheme, and the creation of a European unemployment benefit.