The Committe of the Day (Wednesday) is ECON I After the eruption of the European sovereign debt crisis, which had a different impact on the EU Member States, several countries started to question the need for further economic and monetary integration of the European Union. Following recent measures, such as the ratification of the Fiscal Compact, what should be the further steps of the European economic and monetary integration? Jara Verkleij, Chairperson of ECON I: „The crisis has had and still has a different impact on MS. The interdependence of especially countries within the euro area shifts the problem of recession and depression from a national to an international level due to the shared currency. Basic economic theory states that before the euro, national governments were able to manage their national budget by both fiscal policy – (tax) income and governmental expenses – and monetary policy – interest rates and money supply. With the European Central Bank (ECB) in charge of monetary policy, the de- and revaluation of a currency is not within the competency of national governments anymore and interest rates on bonds are influenced by all countries within the eurozone.“ Check out the very informative overview in the Preparation Kit and the following video on the financial and euro debt crisis: https://youtube/watch?v=0B3zNcFYqj0
Posted on: Fri, 02 Aug 2013 08:28:18 +0000
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