Roadmap Towards a "Genuine" Economic and Monetary Union (Report)

The four Presidents of the European Council, the Commission, the Eurogroup and the European Central Bank (ECB) have proposed measures to improve the stability of the Euro Zone.


The measures are largely unsuitable for improving the stability of the Euro Zone. The proposed compulsory “Reform Agreement” for euro-area Member States suffers due to the fact that the Commission cannot force the euro countries to commit to making specific reforms. The fear is, therefore, that only those reforms will be included in the reform agreement which the contracting euro country would have carried out in any case. The planned insurance of euro countries to cushion against country-specific economic shocks increases the incentive for euro countries to intentionally refrain from undertaking painful reforms aimed at increasing their shock absorption capability.