The European Union’s need for closer fiscal union and cohesion in tackling looming challenges is now widely recognized. But until policymakers follow through with reforms to bring about these outcomes, EU fiscal and monetary policies will continue to do harm, potentially killing the patient before the cure arrives.
LONDON – European economic policymakers have had a packed schedule lately. First, the European Central Bank’s Governing Council gathered to deliberate on what would become its tenth consecutive interest-rate hike. Then, the European Union’s Economic and Financial Affairs Council met for an as-yet-inconclusive negotiation about reforms to EU fiscal rules. Finally, European ministers, central-bank governors, and regulators held their traditional informal meeting to discuss economic governance and fiscal- and monetary-policy coordination. Unfortunately, however, none of these meetings is likely to bring the changes Europe needs.
LONDON – European economic policymakers have had a packed schedule lately. First, the European Central Bank’s Governing Council gathered to deliberate on what would become its tenth consecutive interest-rate hike. Then, the European Union’s Economic and Financial Affairs Council met for an as-yet-inconclusive negotiation about reforms to EU fiscal rules. Finally, European ministers, central-bank governors, and regulators held their traditional informal meeting to discuss economic governance and fiscal- and monetary-policy coordination. Unfortunately, however, none of these meetings is likely to bring the changes Europe needs.