Bundesministerium der Finanzen Berlin Bundesministerium der Finanzen Berlin Klicken Sie, um das Titelformat zu bearbeiten Klicken Sie, um das Format des Untertitel-Masters zu bearbeiten. 1 Bundesministerium der Finanzen Berlin The Eurocrisis: new challenges for the EU’s economic policy Thomas Westphal Director General European Policy German Federal Ministry of Finance 23th of February 2015 College of Europe, Bruges
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Bundesministerium der Finanzen
Berlin
Bundesministerium der Finanzen
Berlin
Klicken Sie, um das Titelformat
zu bearbeiten
Klicken Sie, um das Format des
Untertitel-Masters zu bearbeiten.
1
Bundesministerium der Finanzen
Berlin
The Eurocrisis:
new challenges for the EU’s
economic policy
Thomas Westphal
Director General European Policy
German Federal Ministry of Finance
23th of February 2015
College of Europe, Bruges
Bundesministerium der Finanzen
Berlin
Five points:
1. Talking about EMU
2. The crisis
3. Analysing the current situation
4. What needs to be done to come to a stable
EMU
5. Next steps
Bundesministerium der Finanzen
Berlin3
MEETING OF THE HEADS OF STATE OR
GOVERNMENT
THE HAGUE, 1-2 DECEMBER 1969
“They have reaffirmed their readiness to expedite the
further action needed to strengthen the Community and
promote its development into an economic union. …
To this end they agreed … a plan in stages will be
worked out during 1970 with a view to the creation of
an economic and monetary union.”
Bundesministerium der Finanzen
Berlin
Benefits of a Monetary Union
• No exchange rate risk
• Lower transaction cost
• Lower interest rates
• Lower public deficits
• Improvements for the international
monetary system
4
Bundesministerium der Finanzen
Berlin
Cost of a Monetary Union
Limits the number of policy instruments to
deal with shocks:
• exchange rate policy
• Monetary policy
• commit to coordinate economic/fiscal
policy
5
Bundesministerium der Finanzen
Berlin
Optimal Currency Area
Ex-ante criteria:
• Flexible prices and wages
• Factor mobility
• Financial market integration
• Open economy
6
Bundesministerium der Finanzen
Berlin
Optimal Currency Area
Ex-post criteria:
• Trade integration
• Commitment = stability FDI
• Institutional effects
7
Bundesministerium der Finanzen
Berlin8
Five points:
1. Talking about EMU
2. The crisis
3. Analysing the current situation
4. What needs to be done to come to a
stable EMU
5. Next steps
Bundesministerium der Finanzen
Berlin
A crisis in different shapes
• US-subprime crisis (2007)
• Banking crisis (2008)
• Economic crisis (2009)
• Eurozone debt crisis (2010)
• Social and political crisis (current).
9
Bundesministerium der Finanzen
Berlin
The crisis: loss of confidence
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0
5
10
15
20
25
30
Long term interest rates
BEL DEU IRL GRC ESP FRA ITA NLD AUT PRT FINQuelle: Eurostat