Overview of EMU

Please note: Each In-Depth Analysis is assigned a DOI (digital object identifier), which is a safe and long term way of ensuring a hyperlink to the full text of this report. However, when ESO creates this record, on occasion the DOI still has not been activated by the EU Bookshop. If you find the source url hyperlink does not work please use the alternative location hyperlink listed as a related url.This note focusses on selected policy issues as outlined in the Five Presidents’ Report and which are relevant for parliamentary work. The note provides an overview of the main steps undertaken and of the proposals planned to make EMU more resilient to shocks by addressing the policy and governance challenges unveiled by the financial crisis. These include:

i) labour and product market reforms to rise long-term productivity and growth;
ii) financial integration (Banking Union) to improve market confidence in banks, stabilize financial markets, eliminate fragmentation and cut the sovereign-bank negative feedback;
iii) plans for a Capital Market Union to enhance market-based financing to the economy, diversify the sources of financing, thereby spreading the impact and risks of financial shocks;
iv) plans for a Fiscal Union or fiscal capacity as a macroeconomic stabilization tool against income shocks.

Fiscal union is politically challenging as it involves ceding even more sovereignty from national levels to the euro-area level and is, therefore, strongly connected with political integration (Political Union).

The note is complementary to the document 'Institutions and Bodies in the Economic and Monetary Union', which provides an overview of the governance framework of EMU.

• Primary Source

European Parliament: Directorate-General for Internal Policies of the Union: Publications available via the EU Bookshop http://bookshop.europa.eu/en/directorate-general-for-internal-policies-of-the-union-cbf.cKABstF7wAAAEjwYYY4e5K/

European Parliament: European Parliamentary Research Service: In-Depth Analysis, June 2016: Overview of EMU http://www.europarl.europa.eu/RegData/etudes/IDAN/2016/578970/IPOL_IDA(2016)578970_EN.pdf

ESO: Background information: Five Presidents' Report sets out plan for strengthening Europe's Economic and Monetary Union as of 1 July 2015 http://www.europeansources.info/record/press-release-five-presidents-report-sets-out-plan-for-strengthening-europes-economic-and-monetary-union-as-of-1-july-2015/

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