CAN THE EUROZONE BE STABILISED or WILL EMU BREAK UP?
     
Speakers
On Wednesday 23 March 2011 CEPS hosted a workshop on prospects of the eurozone and EMU in cooperation with ZBW (German National Library of Economics) related to the last issue of their bimonthly journal Intereconomics, in which five experts presented their views on the fate of the EU’s economic and monetary union (EMU).
Speakers from Intereconomics, CEPS, American Enterprise Institute, Rheinisch-Westfalisches Institut fur Wirtschaftsforschung (RWI) and London School of Economics and Political Science not only explained policies and (not desired) progress, but also assessed the challenges ahead in order to secure the euro currency from collapse.

 

Desmond Lachmann, American Enterprise Institute, claimed that the lack of competitiveness in periphery countries will most likely lead to a break-up of EMU, with the weakest countries exiting EMU. He stressed that it is only a question of time when Greece will have to default on its debt.

He was opposed by Daniel Gros, CEPS, who argued that he does not see any exit from EMU since there is no political will to insist upon it.

Waltraud Schelkle of the London School of Economics warned that the EU is fighting an irrelevant problem: it is not the government debt crisis but the bank crisis and asset bubbles that the EU must tackle.

Paul de Grauwe, CEPS, sees no future for the monetary union without deeper political integration, because only collective action can deal with the large externalities that were caused by EMU. m Kösters of the Ruhr-Universität Bochum and Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI) believes that EMU will survive provided that common economic rules are accepted and complied with by the EU and its member states.