Bullettin n. 1/2011
June 2011
CONTENTS
  • Section A) The theory and practise of the federal states and multi-level systems of government
  • Section B) Global governance and international organizations
  • Section C) Regional integration processes
  • Section D) Federalism as a political idea
    • Arestis Philip, Sawyer Malcolm
    The Design Faults of the Economic and Monetary Union
    in Journal of Contemporary European Studies , vol. 19, n. 1, march ,  2011 ,  21-32
    ABSTRACT: The basic proposition of this paper is that the economic problems which have threatened the existence of the euro have not arisen in the main through ‘bad’ behaviour of some member states. They rather come from ‘design faults’ in the construction of the euro project. These faults can be seen as present in the nature of the convergence criteria which focus on nominal rather than real variables; pay no attention to the validity of the exchange rates at which countries enter the EMU, or to the prevailing current account deficits and surpluses; nor to the differences in inflation mechanisms between countries. These ‘design faults’ continue with the inadequacy of a fiscal policy based on numerical targets operating at the national level. The design of the ‘independent’ European Central Bank has largely precluded the necessary co-ordination of fiscal and monetary policy, and has also disabled the central banking system from providing sufficient support to national governments and their budget deficits. It is concluded that a complete re-design of the Stability and Growth Pact and related policies is required.
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