EU Reforms for Tomorrow's Europe

60 Pages Posted: 24 Jan 2001

See all articles by Richard E. Baldwin

Richard E. Baldwin

University of Geneva - Graduate Institute of International Studies (HEI); Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Erik Berglöf

Institute of Global Affairs, London School of Economics and Political Science

Francesco Giavazzi

National Bureau of Economic Research (NBER); University of Bocconi - Innocenzo Gasparini Institute for Economic Research (IGIER); Centre for Economic Policy Research (CEPR)

Mika Widgren

University of Turku - Department of Economics; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: November 2000

Abstract

This Paper contributes ideas and analysis to the ongoing EU reform debate. It consists of three distinct parts: voting in the Council of Ministers, restructuring the ECB's Governing Council, and the setting of enlargement 'examination' dates. The IGC currently focuses on Council voting, Commission composition, closer co-operation and the range of issues to be covered by qualified majority voting. Part 1 of our paper evaluates Council voting reform proposals with quantitative tools from voting game theory. We find that only the 'dual simple majority' plan maintains decision-making efficiency and democratic legitimacy in an EU 27. We believe, however, that the impact of enlargement on the ECB's Governing Council merits also discussion in Nice. We demonstrate that an expanded Governing Council with its current structure would be unwieldy and plagued by decision-making difficulties that would prevent it from making hard choices at the right time. Financial markets could react negatively to the possibility of a dysfunctional ECB; the Nice summit should request the ECB to propose some solutions. Finally, we argue that undertaking these reforms before enlargement should be a priority, not a precondition. Specifically, the EU should now commit to firm accession 'exam' dates and signing dates (for those who pass); this should be done both for the earliest enlargement and for subsequent waves since this would stimulate incumbents and candidates to undertake the necessary reforms while ensuring that the first enlargement does not delay the second.

Keywords: European Union, political economy, IGC, ECB, EMU, enlargement, accession, institutional reform, qualified majority voting

JEL Classification: D7, D71, E58, E61, F15, F36

Suggested Citation

Baldwin, Richard E. and Berglöf, Erik and Giavazzi, Francesco and Giavazzi, Francesco and Widgren, Mika T., EU Reforms for Tomorrow's Europe (November 2000). Available at SSRN: https://ssrn.com/abstract=257697

Richard E. Baldwin (Contact Author)

University of Geneva - Graduate Institute of International Studies (HEI) ( email )

PO Box 136
Geneva, CH-1211
Switzerland
+41 22 908 5933 (Phone)
+41 22 733 3049 (Fax)

HOME PAGE: http://www.hei.unige.ch/~baldwin/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Erik Berglöf

Institute of Global Affairs, London School of Economics and Political Science ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Francesco Giavazzi

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Bocconi - Innocenzo Gasparini Institute for Economic Research (IGIER) ( email )

Via Roentgen 1
Milan, 20136
Italy
+39 02 5836 3304 (Phone)
+39 02 5836 3302 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Mika T. Widgren

University of Turku - Department of Economics ( email )

FIN-20500 Turku
Finland

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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