Politiques macroeconomiques et reformes structurelles: Bilan et perspectivese de la gouvernance economique au sein de l'Union Europeeene

In: Revue d'économie politique, Band 120, Heft 2

Abstract

The run up to the euro has been characterized by soft growth especially in the largest countries of the zone. This disappointing performance is often imputed to the insufficient extent of structural reforms in labor & product markets. The ECB conduct of monetary policy, & the Stability & Growth Pact, would on the other hand have no negative role in the growth performance of euro zone countries. The financial crisis while calling for a temporary softening of the constraints (notably on fiscal policy), would also confirm that monetary policy was more virtuous in the euro zone than in the United States. This article proposes a radically different interpretation. We argue that soft growth is the consequence of restrictive macroeconomic policies. These are not linked to the existence of the euro per se, that in fact has helped growth by minimizing monetary perturbations, but rather to the political compromise that led to the current institutions for the economic government of Europe. This compromise imposed rules for monetary & fiscal neutrality while pushing for structural reforms whose main objective was to impose a new norm on the distribution of wealth. Putting in place the appropriate policies for growth requires rethinking this norm, & the financial crisis may be an opportunity to do so. Adapted from the source document.