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1. Economic Policy Coordination in the Economic and Monetary Union: From Maastricht via the SGP to the Fiscal Pact

Author:
Jørgen Mortensen
Publication Date:
08-2013
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This paper first takes a step backwards with an attempt to situate the recent adoption of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union in the context of discussions on the Stability and Growth Pact (SGP) and the 'Maastricht criteria', as fixed in the Maastricht Treaty for membership in the Economic and Monetary Union (EMU) in a longer perspective of the sharing of competences for macroeconomic policy-making within the EU. It then presents the main features of the new so-called 'Fiscal Compact' and its relationship to the SGP and draws some conclusions as regards the importance and relevance of this new step in the process of economic policy coordination. It concludes that the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union does not seem to offer a definitive solution to the problem of finding the appropriate budgetary-monetary policy mix in EMU, which was already well identified in the Delors report in 1989 and regularly emphasised ever since and is now seriously aggravated due to the crisis in the eurozone. Furthermore, implementation of this Treaty may under certain circumstances contribute to an increase in the uncertainties as regards the distribution of the competences between the European Parliament and national parliaments and between the former and the Commission and the Council.
Topic:
Economics, Markets, Regional Cooperation, Treaties and Agreements, and Monetary Policy
Political Geography:
Europe

2. Living Standards in an Ageing, Greener, Knowledge Economy: Towards a period of lean cows?

Author:
Jørgen Mortensen
Publication Date:
12-2010
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This paper provides evidence on past growth of productivity, analysing the evolution of labour productivity, capital deepening and multi-factor productivity. Based on a literature review of recent studies, it shows that economic growth is increasingly attributable to the accumulation of intangible capital and that consequently, an increasing share of conventionally measured rise in labour productivity has, in fact, been ploughed back into the economy as intangible capital formation. In addition, it shows that on average for the developed countries examined, the growth of total factor productivity has been the main determinant of the increase in living standards over the 50 years from 1960 to 2010. It also demonstrates a striking slowdown in the growth of both productivity and living standards during this period. Looking ahead, it argues that the period 2010 to 2030 is likely to see a considerable expansion of tangible and intangible capital formation and lower growth of multi-factor productivity. The paper therefore concludes that over the next 20 years the scope for growth in living standards in the developed economies will be very limited, on average around half a percent per annum, with serious consequences for social conditions and a likely aggravation of inequalities.
Topic:
Economics, Globalization, Human Welfare, and Labor Issues
Political Geography:
Europe

3. Is Social Europe Fit for Globalisation?

Author:
Jørgen Mortensen, ain Begg, and Juraj Draxler
Publication Date:
08-2008
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies
Abstract:
This policy brief picks up the main observations and arguments included in a study undertaken by CEPS for the Directorate-General for Employment, Social Affairs and Equal Opportunities of the European Commission. It was presented by Iain Begg at a major Commission conference in Brussels on 16 April 2008, which had broad attendance by officials, media people and researchers, and was concluded by a keynote speech by José Manuel Barroso, President of the Commission. The conference took place at a time of emerging financial crisis and rising oil and food prices, aspects emphasised by some speakers as elements throwing new light on some of the arguments in the report. Hans-Gert Pöttering, President of the European Parliament, stressed that promotion of knowledge and innovation constitutes an important condition for enhancing the competitiveness of the European economy. Thus, the Union should take on a leadership role in combining globalisation with social policy, fighting climate change and fostering environmental stability. Mr. Barroso, in his conclusions underlined the necessity of a renewal of social policies based on equal opportunities, access and solidarity.
Topic:
Economics, Globalization, International Political Economy, Markets, and Labor Issues
Political Geography:
Europe

4. The challenge of measuring inflation...when business is not as usual

Author:
Cecilia Frale and Jørgen Mortensen
Publication Date:
10-2008
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
The recent surge in commodity prices and the European Central Bank's decision in June to raise interest rates to combat inflation have ignited a debate about the appropriateness of raising interest rates during a phase of weakening activity. In addition, it is relevant to examine the approaches to measuring the rate of inflation, to consider the advantages and drawbacks of these methods, and finally to throw new light on the possible influence of monetary policy on the fundamental trends in prices.
Topic:
Economics and Foreign Exchange
Political Geography:
United States and Europe

5. Economic Policy Coordination in EMU: What Role for the SGP?

Author:
Jørgen Mortensen
Publication Date:
06-2004
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
The present paper discusses the implications of the recent institutional crisis in the EU provoked by the failure of the Economic and Financial Affairs Council (ECOFIN) to impose the sanction on Germany and France provided for in the Stability and Growth Pact, along with Article 104 and the associated protocol of the Maastricht Treaty. The paper situates the debate concerning the application of the Stability and Growth Pact (SGP) in a broader evolution of the struggle between two schools of thought concerning macroeconomic policy–making in the European Union: the school calling for a strengthening of competences at the EU level (federal economic government) and the school arguing for preserving national competences for budgetary policy even in the face of the transfer of competence for monetary policy to the European Central Bank (ECB). The paper argues that the SGP represents an acceptable comprise between the two views of the schools in so far as it establishes rules to be respected without actually transferring competence to the Council in the field of budgetary policy. Consequently, the SGP has not and does not add to the 'democratic deficit' within the EU institutional framework. The paper argues, nevertheless, that the excessive deficit procedure (EDP) puts too strong an emphasis on the government budget deficit and suggests that emphasis on the sustainable level of public debt would ensure a stronger basis for assessing whether a given budget deficit may be considered excessive or not.
Topic:
Defense Policy, Economics, and Treaties and Agreements
Political Geography:
Europe, France, and Germany