Seizing the moment for euro area reform

The election of Emmanuel Macron as French President gave renewed hope to proponents of the European integration project after the blow of Brexit. There is now a momentum that Berlin and Paris could agree on the view that the euro is incomplete and cannot last without major reforms. We set out proposals for a staged but lasting and workable reform.

Henrik Enderlein (Jacques Delors Institut – Berlin, Hertie School of Governance), Enrico Letta (Jacques Delors Institute in Paris) and Aart De Geus (Bertelsmann Stiftung) see a need for lasting and workable reforms. They want the single currency to succeed and bring back growth to the euro area. Make no mistake: Europe will inevitably be hit by a fresh economic crisis. It is not clear whether this will happen in six weeks, six months or six years. But the authors fear that the European Monetary Union will be ill-prepared; too few of the structural weaknesses that triggered the last (and continuing) crisis have been addressed.

This will be more comprehensive than the previous post-2008 effort that relied excessively on the European Central Bank doing “whatever it takes” to save the euro. European governments must step in, collectively and individually, to build a stronger euro; a revived and more effective EMU must be reconstructed on the basis of both structural reforms and investments. That way the euro can deliver stability, economic growth and political strength.

In this Policy Paper, the authors set out their proposals for a staged but lasting and workable reform. The recommendations are based on a longer report that a working group published at the end of 2016. You can find the full report entitled “Repair and Prepare: Growth and the Euro after Brexit” here.

This publication is part of “Repair and prepare: Strengthen the Euro”, a larger research project of the Bertelsmann Stiftung and the Jacques Delors Institut – Berlin on the future of the euro. More information can be found here: www.strengthentheeuro.eu

Image: CC a_pitch, Source: flickr