“European and Monetary Integration in Europe. The Evolution, Post crisis Adjustment and Prospects”
1. General description
The main objective of the lecture is presenting the evolution of economic and monetary integration in Europe after the II World War. One of the important instrument used to describe economic context of monetary union will be the Optimum Currency Area theory. Than architecture of the EMU will be presented in the context of economic and political optimistic assumptions before the euro adoption and in the first years of its functioning. The roots of the crisis, its prolonged and self-defeating character as a result of the EU institutions instability and inefficiency was also discussed. New institutional solutions taken after crisis to improve euro area functioning and prospects for the global environment and New Member States will be also discussed under different future EU scenarios.
2. Content of the teaching programme
Part I - Evolution of the EU integration processes
The evolution of economic and monetary integration in Europe
The balance of costs and benefits of the monetary unification
Theoretical foundation of monetary integration; Optimum Currency Area Theory (OCA), Traditional OCA, “New” OCA, Endogeneity of OCA, the theory evolution and euro are functioning
Part II- Architecture and functioning of the euro area before the crisis
Fiscal and monetary policy before the crisis
Economic policy before the crisis ?
Accelerating macroeconomic imbalances
Weaknesses of the EU institutions
The euro as an international currency Part III - The Crisis
Transmission of the global crisis into euro area financial, fiscal and economic crises
The roots of the crisis and its prolonged self-defeating character in the EU
Case studies of the selected countries: Why Greece in not the only one guilty of its problem ? Boom and boost case countries: Ireland, Spain, Are northern countries winners from monetary integration ?
Part IV - Is the euro safer after reforms and adjustment ?
The post crisis adjustment (the main reform: The European Semester, Six pack, European Stability Mechanism, Banking Union, the problem of austerity programs restrictiveness – Troika reforms
Extraordinary action taken be European Central Bank
The problem of the EU integration reversibility - scenarios for the EU and EMU
Prospects for monetary integration in Europe
3. Learning outcomes
Knowledge acquainted during the course should allow students:
identify main assumption of economic theories which relates to idea of monetary integration in Europe and other regions,
identify main Optimum Currency Area conditions,
identify main steps in European monetary integration process,
identify main challenges for monetary integration in Europe,
assess the balance of costs and benefits of the euro adoption before and after the crisis,
assess main challenges for monetary integration in Europe, including Poland,
asses the role of the euro as an international currency facilitating financial and trade flows,
assess the role of flexible exchange rate regime in open economies,
discuss current problems and dilemma related euro area integration and also in a broader sense, related to European integration.
4. Proposed literature to discuss
Mongelli, F..P. (2002) "'New' views on the optimum currency area theory: What is EMU telling us?." ECB working paper,
https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp138.pdf?
7f9fcb71c9a79e446251a79273c9ba60
Eichengreen, B. (2010), The breakup of the euro area. Europe and the Euro.
University of Chicago Press, 2010. 11-51.
http://www.nber.org/chapters/c11654.pdf
European Commission White Paper on the future of Europe (2017), http://europa.eu/rapid/press-release_IP-17-385_en.htm
