Documents Thillaye, Renaud 5 results

"The debate about the Eurozone's future usually centres on a clash between economics and politics. Giving the EU greater oversight powers and more spending capacity is said to be the only viable long run solution, but there is little popular appetite for this option. As a result, the Eurozone seems destined to ‘muddle through' to the benefit of creditor countries. This paper seeks to offer fresh insights into this debate by highlighting a third, overlooked dimension, namely the challenge of making governance work in practice. Recommendations for new Eurozone institutions come at a time when EU mechanisms and funds are under fire for being too complex and ineffective. They are said to create moral hazard, lack flexibility, and to heighten bureaucratic red tape. The EU, and the Eurozone, may be facing a crisis of maturity whereby the creation of new institutions risks making matters worse. To illustrate this argument, the paper assesses the desirability and feasibility of two possible governance innovations among those currently under discussion in the Eurozone: a mechanism of wage coordination, and contractual arrangements (or ‘reform contracts') between the EU and member states. Beyond economic and political arguments, the paper invites commentators and policymakers to shift their focus of attention from conception to implementation."

"The sustainability of European economic and monetary union (EMU) has been questioned over the last few years. Criticism has focused on the missing democratic dimension behind recent governance reforms, and the lack of compensating output legitimacy. The paper considers the seriousness of this legitimacy problem. It starts by revisiting the classic division between 'input' and 'output' legitimacy in the context of EMU and finds that, given a lack of will to commit to deeper integration, governance needs to accommodate the diversity of expectations and situations of euro countries. The paper then assesses the way governance works in practice by analysing the interaction between the EU and national democracies on three similar cases: the 2011 labour market reform in Italy, the 2013 pension reform in France, and the 2014 minimum wage decision in Germany. Each of these cases is reflective of a reform related (directly or not) to a recommendation by the EU and conducted under its supervision. The analysis tends to confirm the existence of patterns of legitimation specific to EU economic governance. It suggests that the 'legitimacy problem' is manageable as long as national governments and parliaments are resolute in dealing collectively with their differences. This implies that deepening the ‘transnational' attributes of economic governance could be envisaged as a serious alternative to the remote prospect of a federal Eurozone."

"Despite significant measures to reinforce the EMU's institutional set-up, there is widespread consensus that more needs to be done in order to better deal with cyclical and structural heterogeneity in the EU. Market-based adjustment mechanisms are necessary but not sufficient to advance convergence along more sustainable growth patterns. In that context, institutional reforms advancing integration in the Eurozone are often said to be desirable from an economic point of view, albeit fraught with political difficulties. This paper seeks to provide a fresh outlook on this debate by bringing forward a third, overlooked dimension, namely the feasibility, or ‘implementability', of governance reforms. Like national technocracies, the EU faces the risk of failure whereby the creation of institutions or the introduction of new policies do not always bring about the expected outcomes. The paper develops a multi-criteria analytical framework to assess three possible innovations of economic governance: rule-based wage coordination, contractual arrangements for reforms, and a stabilisation fund for the Euro area. The ‘robustness' of any proposal seeking to increase the EU's interference into national policy-making should start with a clear economic justification, while taking the dynamics of national preferences into account. However, the risks of moral hazard and institutional barriers should also be systematically internalised in the assessment. After outlining the analytical framework (section 1), the paper assesses the three tentative reforms by using a wide range of data and analyses from existing EU documentation, academic and policy literature, and opinion surveys (sections 2 to 4). Each section ends with some recommendations on the desirable scope and design of reforms. Overall, the three case studies stress the need for a careful and reasoned approach to reforming EU governance. Beyond the predictable clash of economic rationales and political hurdles, reform ideas tend to overlook the difficulties arising at the implementation stage. Diverse wage-setting systems, low administrative capacities, and statistical uncertainty for instance all warn against ‘more EU money' or ‘EU interference'. The paper, therefore, makes the case for experimental and small-scale innovations and for a much greater engagement of the public in the politics of EU coordination."