The Euro Crisis and the Unavoidable Challenge. A Political Compact as the Main Economic Solution

Nel mio ultimo paper mi sono concentrato su questioni europee, che ho voluto affrontare con un approccio combinato, economico e socio-politico.

Riprendendo James Madison e Tommaso Padoa Schioppa, l'Unione Europea potrebbe vincere la sfida che non può più rimandare: capire cosa vuole fare da grande e come. La crisi, o megio le crisi degli ultimi 7 anni hanno riportato in auge la stretta connessione che esiste tra economia e politica. Non la connessione banale del malaffare raccontata dai media, ma quella più profonda e complessa dovuta alla natura affascinante di scienze sociali.

Di seguito abstract e introduzione, qui è possibile scaricare il paper completo.

Abstract

The aim of this work is to explain the Euro crisis either from an economic or from a political approach. The will is to underline what emerged during the several crises that affected the European Union and in particular the Eurozone. From the financial crisis, started in the United States in 2007, Europe has also been affected by a sovereign debt crisis and from a deep lack of legitimacy. All these events have shown how big and how limited is this complex system, which still now does not have any similar examples around the world. The various European issues brought to the surface, during the last seven years, forced “Economics professionals” and “Politics professionals”, always separately in the respective fields, to deal with the problem of a precise moment and to adopt a temporary solution. This paper would contribute to create and to develop the idea that now, mainly “thanks” to the Euro crisis lato sensu, both economics and politics must act to find and to introduce measures which are part of a complete system, already thought and clear ex ante, immediately. It is time to rebuild the European Union and this essay suggests a clear political compact. However, every possible proposal has only one way to achieve it: Economics and Politics working together.

Keywords: Economic Integration, Euro Crisis, European Political Parties, European Monetary Union, Fiscal Policy, Political Compact. Treaty Reform

Introduction

This essay analyses the existing links between economic and political issues which have originated from the European institutional system and that are worsened by the crisis. I examine the European model dealing with the economic and the political side to underline the causes and the effects of the various crises which affected the EU and the Eurozone. My approach is based on the combined use of concepts such economic integration together with another such as compound democracy to delineate a new European institutional system.

I will proceed as follows: first I am going to describe the European Union and the European Monetary Union in the recent years, and I will focus on the open questions of the institutional building (first section), then I am going to try to explain why and how the Euro crisis, broadly considered, should force Economics and Politics to talk to each other to tackle the European issues (second section). I will discuss Europe as the federal state union where the main economic cleavages would show a need of political solutions (third section).

I will arrive to the general conclusion that, an approach to the union formed by both economic and political standpoints, does not only explain the cleavages of the EU, but it is also the only way to try to resolve them. Finally, I am going to explain the reason why I consider a political compact the most beautiful challenge anymore avoidable, above all, from an economic point of view.

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