European crises and far-reaching reforms
As a policy area, European economic and financial governance has risen to unprecedented importance since the emergence of the economic and financial crisis. The EU, and more specifically the Euro area, is experiencing exceptionally difficult times. Since mid-2007 it has been hit by two separate yet closely related crises.
First, Europe was confronted with the consequences of a financial market crisis that spilled over from the United States, bringing the banking system on the verge of collapse.
Then while Europe was still contemplating the regulatory responses to this crisis, a second predicament presented itself in the shape of the sovereign debt crisis in autumn 2009. These two major economic and regulatory shocks form the background to some of the most far-reaching reforms of the EU’s system of economic governance to date.
Since, the COVID-19 crisis has triggered a new economic shock, reopening debates on the EU’s ability to take effective crisis measures.
Both the crisis and the proposed and implemented measures to remedy the situation raise numerous interconnected questions that can be inter alia linked to law, economics, political and social science and even philosophy.
They relate, for example, to the desirability and feasibility of transnational macroeconomic and monetary governance and the institutional structures required to ensure sustainable economic governance in line with the EU’s objectives, such as: national sovereignty, the constitutional character of the EU and its Member States, macroeconomic necessities in a currency union, viable forms of decision-making in a multidimensional system of government and governance. But they also relate to the societal consequences of a denationalisation of economic policy.
Our approach is based on the notion that governance structures have a decisive influence on macroeconomic stability at the national, European and international level, through their impact on the effectiveness and coherence of the exercise of policy and decision-making power. To provide for a common framework that can be applied across the different disciplines, we use a broad research matrix that captures the major determinants defining the focus of our research:
- The main policy areas associated with economic governance: monetary policy, economic policy (coordination) and financial market regulation and supervision;
- Three main elements associated with governance: rules, processes and behaviour.
With this approach, applied to each policy field and using insights from various disciplines, we can identify key restraints that are causal for the emergence and development of the framework of economic and financial governance.
This main matrix can lead to further sub-matrices zooming in on partial aspects of economic governance such as the public and private actors involved (government, private parties, civil society), as well as efficiency, legitimacy and effectiveness of regulation.
In order to implement the research framework to issues relating to economic and financial governance at the national, European and international level, we subdivided our research into the following fields: