Authors Iain Begg | Gabriel Glöckler | Anke Hassel ... - The Europaeum

Chapter 3
Euro area governance
and the financial crisis:
new quality or
flash-in-the-pan?
Gabriel Glöckler *
For years prior to the move to Stage Three of Economic and Monetary
Union (EMU) and soon afterwards, it had been assumed, and expected,
that the introduction of the euro would lead to further integration in
the sphere of economic policymaking, at least among the euro area
member states. 1 The facts tell different story: between 1999 and 2007, the
institutional and policy evolution of the euro area economic governance
framework has been incremental at best.
From monetary union to economic union?
A demand-supply analysis
With the introduction of the euro, integration in the field of monetary
policy has reached its final destination. A single central bank, the ECB –
or, to be more precise: a federally-structured central banking system, the
Eurosystem – conducts a single monetary policy, sets interest rates and
decides on liquidity management for the euro area as a whole. For the
purposes of monetary policy, euro area member countries indeed ceased
to exist, effectively becoming constituent parts of a larger entity.
* The opinions expressed in this paper are those of the author and do not represent the views of the European
Central Bank. Any errors or omissions are exclusively the responsibility of the author. Correspondence:
gabriel.glockler@ecb.europa.eu. The author would like to thank Gilles Noblet, Wouter Coussens and Marion
Salines for their comments.
Chapter 3 – Gabriel Glöckler 45