: Future of the eurozone
We´ve asked the speakers of the Workshop 3 Questions about their statements. The answers are on the next site. The Workshop was about the EU and especially the Euro Area in the middle of a deep crisis. It is highly controversial among politicians as well as academics where a way out should be leading to. Against this backdrop IMK organized a workshop on the “Future of Europe” where academic scholars of Economics and Political Science discussed the relevant issues. The debate went along several fundamental questions on a future Europe.
There was a critical assessment of the economic policies so far, be-cause measures taken had deepened the rift among member countries rather than bridging it. This immediately leads to the question whether the Euro can be saved as a joint currency. The structural heterogeneity of the Euro area with respect to wage and price formation as well as economic policy approaches speaks against it. It is difficult, if not impossible to preserve monetary stability under these circumstances. On the other hand, the growth potential of a joint currency and the undisputed high costs of a break up were seen as arguments in favour of keeping the Euro.
All this happens in a situation where uncertainty is significantly enhanced. Financial investors are desperately seeking safe assets they cannot find anymore. The reason is that public bonds can no longer play this role under new default rules. While some scholars find this appropriate to avoid moral hazard problems for national governments of getting over indebted, others see it as a source of increased uncertainty that hampers investment and growth.
This issue is a special case of more general question of utmost importance: Should European politics be renationalized, or must it become more integrated to preserve a stable Europe, given that the status quo is not sustainable. The former provides a chance to reconcile diverging national interests with at least a reduced form of a European community. The latter allows to establish a new kind of European stability which results form a truly European perspective beyond any national interest.
A crisis in its original meaning is a situation where decisions have to be taken to lead to one way or the other. Presently it is still far from obvious which way should be taken. In other words, the crisis will continue.