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What reforms for Europe's Monetary Union: a view from Spain

How is a successful European Monetary Union still possible in today's ever-shifting political landscape? What reforms need to occur in order to guaran



Bruegel was happy to host a discussion about the following issues: the completion of a Monetary Union in an evolving international community, a European monetary policy and financial system, and lessons learned through the past year in the European economy.

This event featured the presentation of the Euro Yearbook 2018, where the authors set out to describe, analyse, and discuss the process leading to a European Monetary Policy. The results were presented by the project's director Fernando Fernández.

Afterwards, a discussion proceeded regarding the takeaways from the 2018 Yearbook in light of the current European debate.


Reforming the Monetary Union is one of the main challenges faced by the EU.

José Carlos García de Quevedo introduced the conference topic by stressing that these reforms must be carried out in a complex context characterized by negotiations over Brexit, US-China trade war and rise of populism in Europe.

Fernando Fernández presented the Euro Yearbook 2018, where practitioners, academics and policy-makers’ views on the recent evolution of the EMU have been collected. He compared their ideas and then gave his own view.

He discussed the three sections of the book:
1) What the Euro wants to do when it “grows up”. The main point of this section is to understand what the ECB has to do to become more similar to traditional Central Banks.
2) Analysis of Monetary policy and the banking system.
3) What is necessary to complete the EMU. Fiscal union and banking union are discussed.

First of all he identified the political problems hampering an effective implementation of necessary reforms. He was doubtful on whether people want the Euro to survive. Second, in his opinion the ECB needs to “normalize” itself and strive to fulfil the tasks that the other main CBs in the world do. In addition, the Banking Union has to be completed through the implementation of its third pillar (the European Deposit Insurance Scheme). Fourth, the Union also needs a single insolvency procedure (not only a single Resolution Mechanism). Such a procedure would help to liquidate banks with the same rules across Europe. With this respect, there is another point that needs to be addressed: a significant part of the banking system in several EU countries is protected by governments and not subjected to competition and the discipline of the market. Fifth, Mr. Fernandez pointed out the necessity to enforce the European fiscal rules. In reference to this point, fiscal capacity at European level must be developed and a European safe assets (Eurobonds) needs to be established. Eurobonds would strengthen the role of Euro as an international reserve currency.

Gabriele Giudice dealt with the issue of the political will to reform the Union. The evolving international challenges are persuading European people and countries that the right time to start reforms is approaching.
He then went back to the issues concerning the completion of the Banking Union and potential introduction of Euro safe assets. He also emphasised that reforming the legal framework of the ESM is crucial.

Isabel Riaño highlighted the importance of discussions on reforms while European institutions are renewed after the European elections. In her opinion, European policy-makers know what has to be done to reinforce and deepen the Monetary Union. They are also aware of the challenges that are emerging, like the rise of populism. In spite of these difficulties, she sees many chances for the EU to overcome its difficulties and move ahead. In this context she underlined the major role of risk sharing policies within the European banking system.

Afterwards she assessed the stage at which the EU currently is. Expected rise of populism did not materialize in the last elections. Brexit has been definitely affecting negatively the European project, but is also bringing all the European countries together. The same is true for the international trade war. Also, the Franco-German axis is essential but is not enough to move the European agenda forward. With this respect, Spain could play a major role.

At the end of the conference the panellists discussed the concrete chances the EU has to implement its reforming agenda and answered questions about fiscal rules, rule violation, possible European treasury, and progress in the Banking Union.


Euro Yearbook 2018

Euro Yearbook Executive Summary 2018

The event will be livestreamed. There is no need to register for the livestream.