Please enable JavaScript.
Coggle requires JavaScript to display documents.
Economic and monetary union - Coggle Diagram
Economic and monetary union
MAIN GOALS
Converging economic and fiscal policies of EU Member States
Single monetary policy, common currency, single monetary authority (ECB), and coordinated macroeconomic policies
EVOLUTION
1950s: Keynesianism and Bretton Woods gold standard
1971: Werner Plan for EMU
PLAN ( FAILED) = SINGLE CURRENCY + SINGLE ECONOMIC POLICY
1979: European Monetary System (EMS) established
ZONE OF MONETARY STABILITY
1980s: Real progress towards monetary integration
ECU = PRECUSOR OF EURO + INTRO EMI = COORDINATING MONETARY POLICY AMONG MEMBERS
1989: Delors report and new plan for EMU
3 stages
1st stage = coordination of economic policy
2nd stage = single currency
3rd stage = single central bank
1992: Maastricht Treaty and scheme for EMU
1997: Stability and Growth Pact (SGP) and Excessive deficit procedure
Ensuring maintenance of fiscal discipline + reduction of budget deficit --> fiscal surveillance + imposition of penalties if failing to meet budget targets
1998: First Broad Economic Policy Guidelines (BEPGs) adopted
1999: Launch of the EURO and ERM II
EURO AREA
11 initial member states (Denmark and UK opted out, Greece did not meet convergence criteria)
ERM II for wannabe Euro area members
Croatia joined in 2023
Bulgaria and Denmark in ERM II
Non-Euro Area Members
Andorra, Monaco, San Marino, Vatican using the euro with a monetary agreement; Kosovo and Montenegro using the euro unilaterally
EURO CRISIS AND REFORMS
2008 Global Financial Crisis: European Financial Stability Mechanism (ESM) and European Financial Stability Facility (EFSF)
ECB Intervention: "whatever it takes"
Reforms
European Semester (2011))
"Six pack" (2011)
Fiscal Compact (2012)
"Two pack" (2013)
Single Resolution Mechanism and Fund (2014)
Single Supervisory Mechanism (2014)
KEY FEATURES
Single Currency: Eurozone members use a single currency
Monetary Policy Coordination: No individual decisions on monetary policies
Macroeconomic Policy Alignment: Macroeconomic policies aligned but not common
Fiscal Stability: Stability and Growth Pact (SGP) maintains fiscal stability
Emergency Loans: European Stability Mechanism (ESM) for emergency loans
DECISION MAKING
MONETARY POLICY
CENTRALIZED DECISION MAKING IN THE ECB
ECONOMIC POLICY
Policy coordination among Member States
EXTERNAL REPRESENTATION
Intense transgovernmentalism in external representation of the Euro Area