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Towards a Federal Europe: The Impact of a Genuine Economic and Monetary Union on Markets & Citizens (Part I)

On the 21st of January, I had the honour of chairing Durham European Law Institute’s very first LLB Students’ Conference. The event was organised at the initiative of 3rd year undergraduate students. Shortly after the end of the European Year of Citizens and in light of the upcoming European Parliamentary elections, this event demonstrates that Durham law students do not remain indifferent to significant developments currently occurring in the European Union.

At the same time, the conference would have never taken place without the support of Durham’s European Law Institute. In line with DELI’s recent efforts to expand the scope of its activities, the LLB Students’ conference confirms DELI’s role as a leading centre for research in European Law.

A ‘genuine’ EMU

Inspired by a report of the President of the European Council, Herman Van Rompuy, the introduction to the conference covered the elements of what the report referred to as a ‘genuine’ Economic and Monetary Union (EMU). In this report, the consolidation of the EMU is considered a direct response to the problems deriving from, or revealed by, the financial crisis. Consequently, the report’s suggested ‘building blocks’ unsurprisingly focus on four problematic areas.

The first building block is referred to as an ‘integrated financial framework’.  Under this section the European Council contends that reform to ensure stability and to minimise the costs bank failures in the Eurozone is essential. It also proposes a number of measures to achieve financial stability. The banking union and the Single Supervisory Mechanism (SSM) for example, fall under this initiative.

The second building block sets out an ‘integrated budgetary framework’. Through this framework the European Council calls for increased cooperation to enable sound fiscal policy-making, issuance of common debt and new forms of fiscal solidarity. Reform in this field is also closely connected to the European Council’s long-term aim of achieving a fiscal union.

The third building block involves an ‘integrated economic policy framework’. The importance of economic policy in promoting sustainable growth, preventing future shocks and ensuring the Union’s competitiveness in the world economy is perhaps self-evident. The report emphasises these objectives and demands enhanced coordination and convergence, in areas such as tax policy.

Lastly, the European Council’s report touches the controversial issue of democratic legitimacy and accountability. It is submitted that all reform must take place within a democratic framework, which in turn relates to the social dimension of integration and the notion that reform is not intended to merely benefit markets but to also improve the lives of citizens.

Issues raised

The ambitious roadmap set out in President Van Rompuy’s report raises a number of questions that this conference attempted to answer.

  • Firstly, to what extent did the identified pillars constitute a welcome and realistic basis for reform in the EMU?
  • Secondly, how far have the European Council’s suggestions been implemented through reform initiated in the last two years?
  • Thirdly, what are the broader implications of and to what extent can the European Union achieve, a ‘genuine’ EMU?
  • Fourthly, has the political momentum for reform, particularly on the basis of these proposals, diminished?

To answer the above questions, the conference included four presentations:  on the SSM by Dr. Pierre Schammo, on the Fiscal Compact by 3rd year student Vladislave Ioukhyma, on tax policy by Professor Rita de la Feria and on citizens’ rights by 3rd year student Maria Haag. Through a critical evaluation of these areas, conference participants were able to form their own opinions on the European Council’s vision for a ‘genuine’ EMU.

Andreas Georgiou

LLB Student, Durham Law School

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