The date of a workshop on these issues on 29 June – just a few days after the utterly surprising Brexit vote – could not have been picked more timely. Renowned experts discussed on “the future governance of the euro area and fiscal union” in an event jointly organized by BDI and Konrad-Adenauer-Stiftung (KAS). Esther de Lange, MEP, Christian Calliess (European Commission), Jeffrey Franks (IMF) and Guntram Wolff (Bruegel) kicked off the debate with short inputs and exchanged their views with MEPs and representatives of the other European institutions, businesses and the civil society.
Three challenges are predominant to advance EMU governance: (1) cleaning up the problems in the banking sector, (2) increasing investment and boosting growth and (3) dealing with the migration issues, explained Guntram Wolff. Some of them can be tackled in the short run, others need to be dealt with in the long run. This is the main reason why the “Five-Presidents-Report” to complete the EMU recommends two stages, elaborated Christian Calliess. Big projects like a joint budget to manage migration flows are not likely to be addressed immediately due to the complexity of implementation. However, the preparatory works must start now. A key feature of improved EMU governance is conditionality, as stressed in the Five-Presidents-Report. For instance, the European Commission could link structural funds to their country specific recommendations.
Jeffrey Franks emphasised that all instruments must be judged on four criteria: (1) effectiveness, (2) efficiency, (3) transparency and (4) legitimacy. Currently, fiscal governance in the EMU seams to perform weakly in most of these yardsticks. In the history of the IMF, one key learning was that national ownership is essential for progress with reforms. That point was stressed as well by MEP Esther de Lange. She mentioned that there is still little compliance of member states with European legislation that was voted for by the very same members in the European Council. A main conclusion is thus the need to ensure national ownership and commitment to reforms. Several measures like independent institutions acting as referee, clearly communicated messages and direct value added for the public may be of help, but there is no silver bullet.