*** JEAN-VICTOR LOUIS: L'Union européenne et sa monnaie. Editions de l'Université de Bruxelles (26 av. Paul Héger, B-1000 Brussels. Tel: (32-2) 6503799 - Fax: 6503794 - email: editions@admin.ulb.ac.be - Internet: http://www.editions-universite-bruxelles.be ). "Commentaire J. Mégret" series. 2009, 328 pp,€40. ISBN 978-2-8004-14454-4.
The 325 million Europeans living in the sixteen European Union Member States who share the same currency and the same monetary authority are generally unaware and extremely badly informed about the fact that the euro celebrated its tenth anniversary in 2009 in that the changeover to the third phase of Economic and Monetary Union under the Maastricht Treaty occurred on 1 January 1999. One could even have been celebrating the twentieth anniversary in fact, because the first phase of EMU began before the Maastricht Treaty even came into force on 1 July 1990, when the June 1989 Madrid European Summit decided to make the EU directive on the free circulation of capital operational. Why are the EU institutions, especially the European Commission, so loathe to talk about the euro? No doubt, as the author states in the preface, the circumstances did not create the mood for celebrations, in that "the world is undergoing the worst financial, economic and social crisis since the Great Depression." Other reasons may well have come into play, however, like the fact that "speeches about the success of the euro and its protective role, which encourage some countries (be they members of the European Union or not) to want to join the single currency, co-exist with predictions made by people who believe in the dismantling of the eurozone because of the serious imbalances within it." Not to mention that in terms of its currency, the EU is clearly not so much "united in diversity" as highly divided while claiming to be united…
Whatever the case may be, this book fills an awkward silence at the right time. Who better than Jean-Victor Louis to take responsibility for this entirely rehashed and updated (up until the Lisbon Treaty) third edition of the book in the "Commentaire Jacques Mégret" series on Economic and Monetary Union? Emeritus professor at the European Studies Institute of the 'Université Libre de Bruxelles,' the author is an eminent lawyer who was honorary legal advisor to the National Bank of Belgium for a quarter of a century, providing him with the opportunity to be a highly privileged eye-witness and player in the "formidable enterprise" of creating the single European currency. It is the history of this European monetary odyssey over nearly forty years that he recounts and explains in the book, making a wholly natural legal analysis, of course, but also "necessarily touching on not only economic justifications for the rules set out in the Maastricht Treaty, but also the questions raised by implementation of the said rules".
The author starts by discerning the reasons for the Rome Treaty's "silence" about currencies and the European Economic Community's "apathy" about monetary issues until the 1969 "Barre Plan". Things could have got underway with the "Werner Plan," but the mindset was not yet mature enough to agree to the necessary giving up of sovereignty. After setting out the ambitions and, more importantly, the limits of the European monetary snake and then the European Monetary System, and after the Single Act granted the EU a degree of "monetary capacity," the author turns to the "Delors Report" which, although containing a number of fundamental elements of the "Werner Plan," moves away from it economically, "giving a wider role to national decisions in the name of subsidiarity and the correlative concern to allow Member States to retain a degree of autonomy over economic decision-making". In a way, the worm was already in the fruit and it has not proved possible to remove it, with the economic arm of EMU being overshadowed by the monetary arm. After setting out the historical backdrop, the author describes and analyses the characteristics of EMU, looking at the asymmetry that has lasted to the present day between economics and monetary issues. The author discerns seven causes of this: trusting the market to discipline budget policy; countries' desire to compensate for the loss of use of exchange rates to deal with asymmetrical economic crises; the lack of political will to transfer considerable powers, a transfer that would have required institutional reforms; the lack of desire to give the European Commission greater executive powers "as an alternative to controls by peers" that characterises the surveillance procedure for economic policy; the reluctance of some Member States to introduce specific procedures for countries that have joined the euro; and doubts expressed by economists about the need for and utility of coordinating policy if budget discipline is preserved. With the same rigour and meticulousness, the author then studies the transition and changeover to the single currency (including in the light of the action of the European Monetary Institute and the exemptions and derogations that were awarded, about which the author comments that "Sweden's attitude clearly violates the duties of countries to do all they can to respect the desire expressed in the Treaty of rapidly achieving the single currency"), followed by the actual content of economic union (coordination of economic policies, multilateral surveillance, budget discipline and excess deficits, the Economic and Financial Committee, the Economic Policy Committee, specific measures taken by Member States that have joined the euro, and Eurogroup), the monetary arm (the European Central Bank, Eurosystem and the national central banks, relations with the institutions and political or jurisdictional control, etc.) and the single currency itself (basic rules, conversion and rounding up rules, issuing of notes and coins, legal tender, tackling counterfeiting, etc.). The final chapter looks at the "euro's foreign relations," with Jean-Victor Louis examining the institutional aspects of the International Monetary Fund in the light of a satisfactory role for the European Union (this is still highly uncertain but the economic crisis reminds us that needs often must). The book contains a bibliography, an alphabetical index, a chronological index of case law and a glossary of acronyms and abbreviations. A must-read.
Michel Theys
*** KLAUS LIEBSCHER, JOSEF CHRISTL, PETER MOOSLECHNER, DORIS RITZBERGER-GRUNWALD (Eds.): Currency and Competitiveness in Europe. Edward Elgar Publishing (15 Lansdown Road, Cheltenham, Glos GL50 2JA, United Kingdom. Tel: (44-1242) 226934- Fax: 2262111 - email: info@e-elgar.co.uk - Internet: http://www.e-elgar.com ). 2008, 326 pp. ISBN 978-1-84844-035-7.
Combining monetary and competitiveness issues, this book aims to achieve better understanding of the dynamics of exchange rates and how they boost economic competitiveness. The authors challenge preconceived ideas that exchange rates are totally disconnected from the real economy, showing how the two are connected and focussing on the transition and convergence targets that central and East European countries have been subject to since the time when they became EU accession candidates. Looking at issues like financial globalisation and global imbalances, the challenges facing countries that have embarked on the path to Economic and Monetary Union, and a detailed analysis of exchange rates and the idea of competitiveness, this book clearly plays a crucial role in understanding how the real economy meshes with monetary policy.
(TBa)
*** FRITZ BREUSS, JORGE A. FORNERO: An estimated DSGE model of Austria, the Euro Area and the U.S.: some welfare implications of EMU. Editions Wirtschaft Universität Wien (39-45 Althanstrasse, 1090 Vienna. Tel: (43/1) 31336-4135 - Fax: 31336-758 - email: europafragen@wu-wien.ac.at - Internet: http://www.wu.ac.at/europainstitut ). "Working Papers" series, No. 81. 2009,57 pp.
This issue in the ever pertinent Working Papers series provides a dynamic stochastic DSGE equilibrium model, used to identify the characteristics of Austria as a small, open economy, along with the characteristics of the eurozone and the United States. Using as a sample the period just before and just after Monetary Union, the authors used the model to calculate the relative cost of welfare in Austria and the eurozone, showing them that costs fell in the eurozone after Monetary Union, but rose in Austria.
(NDu)
*** ELISABETH GUIGOU, DANIEL GARRIGUE: En finir avec les "trous noirs" de la finance mondiale. Du G20 de Londres au G20 de Pittsburgh. Commission des Affaires européennes de l'Assemblée nationale (Boutique de l'Assemblée nationale, 7 rue Aristide Briand, F-75007 Paris. Tel: (33-1) 40630033 - Internet: http://www.assemblee-nationale.fr ). "Rapport d'information" No. 1834. 2009, 215 pp, €6.50. ISBN 978-2-11-125780-1.
Ahead of the meeting of G20 heads of state in Pittsburgh on 24 and 25 September 2009, this newsletter makes a hefty and well-marshalled case against the damage wreaked by international capital, particularly tax havens and the mechanisms used by tax havens, hedge funds top of the list. The French parliamentarians who wrote the report, including a former secretary of state for European affairs under François Mitterrand, make a lively case for the European Union to play a key role in ensuring that tangible decisions are taken to tackle this scourge. They state that this will require the EU27 to beef up its draft legislation to regulate hedge funds, describing it as "unacceptable in its current state". Arguing that the crisis should be used as an opportunity to "challenge fiscal competition between countries, starting with the harmonisation of tax within the European Union," the authors also suggest that the European Parliament should assess the new President and members of the European Commission in the light of their attitude to this issue.
(PBo)
*** Confrontations Europe (227 bld. Saint-Germain, F-75007 Paris. Tel: (33-1) 43173283 - Fax: 45561886 - email: confrontations@wanadoo.fr - Internet: http://www.confrontations.org ). July-September 2009, No. 87, 46 pp, €7.
Each issue of this review so dear to the heart of former MEP Philippe Herzog confirms the wealth of the review's expertise and substance and its ability to tackle the key questions of the day in a creative and voluntarist manner. The most recent issue is a case in point, particularly its special report on how global warming and the economic crisis is an opportunity to shake things up and move towards a more sustainable economy that incorporates ecological costs. Various essays look at the financial and banking crisis, while in the editorial, Philippe Herzog calls on the European Union to initiate new common policies to create engines of growth rather than simply relaunching the ineffective Lisbon Strategy. He also calls on the Commission to "not (…) slip into the role of being simply a secretariat fro the Council," meaning that the Commission will need "the capacity to lead, a return to collegiality and rebuilding connections with citizens".
(MT)
*** ULRIKE STIERLE-VON SCHULTZ, MICHA EL H. STIERLE, FREDERIC B. JENNINGS Jr, ADRIAN T. H. KUAH (Eds.): Regional Economic Policy in Europe. New Challenges for Theory, Empirics and Normative Interventions. Edward Elgar Publishing Limited (The Lypiatts, 15 Lansdown Road, Cheltenham, Glos GL50 2JA, UK. Tel: (44-1242) 226934 - Fax: 262111 - email: info@e-elgar.co.uk - Internet: http://www.oup.com ). "INFER Advances in Economic Research" series. 2008,262 pp, ISBN 978-1-84844-038-8.
Following on from the 7th annual INFER conference, held in London in October 2005, this book examines Europe of the regions, with the authors presenting empirical, theoretical and policy research with particular interest in changes since the 2004 round of EU enlargement. The research concentrates on three areas. The authors start by examining the disparities between the different regions of the European Union, and the mechanisms (human capital, the spread of technology, transport infrastructure and so on) at play in the convergence process, both in terms of the individual Member States themselves and at supranational level. They then investigate the characteristics, problems and benefits arising from the relocation of economic activity, examining the question of why one area is chosen rather than another, how this impacts on the relocation of manpower and the consequences for adjacent regions. In the final part of the book, the authors analyse the experiences and lessons of the past. The essays cast an empirical eye over the EU's Structural Funds and their impact in the Member States, paying particular attention to Spain (which has been one of the greatest beneficiaries of the Structural Funds in recent decades). The authors also make a macroeconomic assessment of the EU's regional policy in order to discover how it has contributed to convergence between the regions and also with a view to stimulating academic debate. This is an extremely technical book aimed first and foremost at academics and researchers.
(NDu)
*** MARC LAFFINEUR: Budget de l'Union européenne pour 2010: quels moyens pour la relance? Commission des Affaires européennes de l'Assemblée nationale (see above). "Rapport d'information" No. 1796. 2009, 51 pp, €3.50. ISBN 978-2-11-125412-1.
This newsletter analyses the preliminary draft European Union budget for 2010. The author argues that the key challenge will be ensuring a common contribution is made to stimulating economic recovery, while pointing out that this common effort will be marginal in any case because the EU budget is not large enough to have much of an impact. He calls for a fundamental re-think of the role of the Financial Perspectives (the EU's budget).
(PBo)