2014/24 | LEM Working Paper Series | ||||||||||||||||
Building on institutional failures: the European Treaty on Stability, Coordination and Governance |
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Benjamin Coriat |
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Keywords | |||||||||||||||||
Fiscal Compact, ECB, public debt, European crisis
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JEL Classifications | |||||||||||||||||
H5, H6, G2, B5
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Abstract | |||||||||||||||||
The paper is devoted to an analysis of the Treaty on Stability
Coordination and Governance (TSCG), also known as the “Fiscal Compact”
Treaty signed between the EU member states in 2012. We argue than the
TSCG, instead of helping to “repair” the institutional failures on
which the Euro and the Eurozone are built, strengthens them and
further weakens the construction on which the European member states
operate. In this sense, the Treaty explains why the crisis in Europe
is so deep and persistent, and why the member states of the Eurozone
are having such difficulty in returning to a path of balance and
growth. After defining the “core” of the Treaty more precisely, by
describing the nature and significance of the new rules it has
introduced in more detail, we explain why these rules create
supplementary obstacles in the road to recovery.
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