Beyond the Economics of the Euro: Analysing the Institutional Evolution of EMU 1999-2010

42 Pages Posted: 26 Sep 2011

See all articles by Marion Salines

Marion Salines

European Central Bank (ECB) - Directorate General International and European Relations

Gabriel Glöckler

European Central Bank (ECB)

Zbigniew Truchlewski

Independent

Paola del Favero

European Central Bank (ECB)

Date Written: March 21, 2011

Abstract

This Occasional Paper examines how and why the institutional framework governing EMU has evolved since the creation of the euro. Building on theories of institutionalism, the paper in particular investigates to what extent functional spillovers from the single currency into other policy domains, like macroeconomic policies or financial regulation, met with an adequate institutional response, and to what extent the existing institutional framework conditioned the response to the financial crisis. The interaction between policy requirements and institutional capabilities is examined both in 'ordinary times' (1999-2007) and under 'crisis conditions' (2007-10). The paper uses a typology of change which helps to put into perspective both the resilience of the institutional framework of EMU and its capacity to adapt. In this respect, it allows for a better understanding and framing of the current reforms of EMU economic governance. It concludes that even though the crisis will accelerate institutional development, it will do so only gradually, as path dependence and an inbuilt bias towards incremental change will prevent policy-makers from pursuing a 'clean slate' strategy.

Keywords: EMU institutional architecture, historical institutionalism, rational choice, institutional change

JEL Classification: D79, E02, F02, F51, F53, F55, F59

Suggested Citation

Salines, Marion and Glöckler, Gabriel and Truchlewski, Zbigniew and del Favero, Paola, Beyond the Economics of the Euro: Analysing the Institutional Evolution of EMU 1999-2010 (March 21, 2011). ECB Occasional Paper No. 127, Available at SSRN: https://ssrn.com/abstract=1791572 or http://dx.doi.org/10.2139/ssrn.1791572

Marion Salines (Contact Author)

European Central Bank (ECB) - Directorate General International and European Relations ( email )

Kaiserstrasse 29
D-60311 Frankfurt am Main
Germany

Gabriel Glöckler

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Zbigniew Truchlewski

Independent ( email )

Paola Del Favero

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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