The Euro Area crisis has exposed flaws in the institutional framework of the European Economic and Monetary Union (EMU). The immediate causes of the crisis have been widely debated - including weak governance, persistent erosion of competitiveness in some countries, and easy financing by banks. However, there is little discussion about a fundamental shift in the nature of European integration which took place in mid-1990s: when plans for launching the euro became credible and binding. It was not understood that Europe had shifted from a Common Market Era, during which EMU’s foundations were laid, to a “Union Era” with an incomplete institutional framework.
This new Occasional Paper reviews the leap in governance now taking place, whilst taking stock of what has worked and proved resilient over the previous 60 years. The European Index of Regional Institutional Integration (EURII) provides a tool to articulate, synthesise and monitor the process of European institutional integration since 1958 and to track all ground-breaking reforms since 2010. EURII has both a backward looking as well as forward looking components anchored in the Four-Presidents Report. EURII shows the great progress already made, but also flags were further efforts are still indispensable. A whole new governance and an integrated economic policy framework are within reach. We hope that this OP will raise awareness of the progress made: after all such reforms are only as good as they are widely explained, understood, and accepted.
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