The future of EMU reforms: at the mercy of the economic cycle?

On 6 May 2019 the Centre for European Policy Studies (CEPS) organised in its headquarters at Place du Congrès in Brussels a day of debates which focused on analysing the reform process of the Economic and Monetary Union, the various positions of the Member States' governments and some social actors, as well as the possible way forward from a situation that was qualified as a "blockage of the main reforms". In the six round tables that structured the debate, a total of 26 people participated, including keynote speakers, speakers and moderators. All of them were academics or officials of the European institutions.

The keynote address was given by Sonja Puntscher-Riekmann (University of Salzburg). Her main messages were that we must establish a compromise between fiscal transfers and fiscal discipline and that gradual convergence is only possible if national financial risks are reduced. Within the roundtable on The future of EMU reforms – is gradualism the only option?, Johannes Lindner (European Central Bank) alone departed from the implicit thesis in the title, claiming greater ambition of reforms. The other speakers, in particular Reinhard Felke (European Commission) and Christina Jordan (European Council), gave way to extreme possibilism.

Javier Doz Orrit, EESC member and rapporteur for the opinion on Euro area economic policy 2019, took the floor in the general debate by saying that the EESC supports deeper reforms, in terms of integration, social dimension and democracy, and that the presence of nationalist and far right parties in many governments had dangerously displaced the focus of debates and reforms, which was a serious mistake. Other topics that were discussed included the preferences and modes of negotiation of governments, the situation of the Southern EU Member States, the role of national parliaments, the issues of de-constitutionalisation of economic governance and how to reform when nobody wants to do it. Among others, Gabriele Giudice (European Commission) and Daniel Gros (director of CEPS) gave very interesting presentations on these topics.

The overall conclusion from this day of debates was that only small and gradual reforms of EMU are possible.