Guest lecture Abraham_Vandenbroucke

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The social dimension of European economic and monetary integration Puzzles paradoxes perspectives Frank Vandenbroucke Guest lecture in: Economics Integration – Prof Abraham 11 December 2019 the project according to founding fathers: a belief in convergence • would support simultaneous pursuit progress cohesion both within countries (through gradual development welfare states) between upward across Union) Initial division labour: development: supranational policy coordination security rights & anti-discrimination: national sovereignty (in theory) machine worked… more or less… until 2004/2008 US 1 4 EU27 3 2 0 9 8 7 6 5 Median income states (US ‘representative state’ = 1) EU Member States (EU MS’ A tragic dilemma enlarged heterogeneous EU)? Minimum wages what governments can do: net disposable couple with children one minimum-wage earner 45000 40000 35000 30000 25000 20000 15000 10000 5000 LU IE AT FI UK DE FR NL DK BE IT SI EL CZ ES SK EE PL HU LT PT LV RO BG Net Gross wage Source: CSB/MIPI 2004-06 60 2012 50 40 30 20 10 Very high work intensity High Medium Low low Work household Bron: Eurostat SILC 2005-2007; 2013 Reconciling openness domestic Access benefits: general principle non- discrimination exception: posting workers Transparency coverage minimum regimes Division Design flaws De Grauwe Monetary Union 12th ed p 77 Macro-economic stabilisation: smoothing shocks: vs EMU 80% 70% 60% 50% 40% 30% 20% 10% US: – federal tax-and-benefit system state-based unemployment insurance framework extensions Saving taxes transfers Factor capital depreciation Total smoothed 0% -10% 1979-1998 1999-2010 Furceri Zdzienicka Euro Area Crisis… IMF Working Paper Why are stabilization instruments centralized unions? Risk pooling when shocks asymmetric Even not without mechanisms including fiscal stabilizers union is fragile (via disruption government bond markets) Fiscal via re-insurance systems? Unemployment benefits stabilization: requirements for effectiveness: sufficiently generous notably short-term; sufficient rates benefit schemes; no labour market segmentation that leaves part force poorly insured; proliferation employment relations integrated into insurance; effective activation unemployed individuals; These principles become fortiori imperative if Eurozone be equipped systems: institutional moral hazard shared conception flexibility Labour institutions deliver on (effective collective bargaining) Cluster an adequate stabilisation capacity MS: insured against unemployment; systems individuals  Convergence some key features Pillar Social Rights Gothenburg Summit 17 November 2017 systemic level their functions (e g fair corporate taxation …) guide substantive standards objectives leaving ways means basis operational definition ‘the model’ cooperate explicit purpose pursuing pan-European based reciprocity union: puzzles Boone Marc; Deneckere Gita Tollebeek Jo (eds ) End Postwar Future Europe Essays Ian Buruma Verhandelingen van de KVAB voor Wetenschappen en Kunsten Nieuwe reeks 31 Uitgeverij Peeters Open at www frankvandenbroucke uva nl edition Oxford: Oxford University Press 2018 Zdziencicka Crisis: Need Supranational Sharing Mechanism ? 13/198 Reduction Moral Hazard: Vaccination Metaphor Intereconomics Vol 52 May/June Number pp 154-159 Rights: from promise delivery Introduction ‘European (ESU) public forum debate’ EuroVisions http://www euvisions eu/ Barnard Baere after Crisis Cambridge: Cambridge September https://doi org/10 1017/9781108235174 Introductory chapter item 263 Structural versus competition: limits diversity policies Economic ECFIN discussion paper 065 Commission Directorate-General Financial Affairs Brussels July http://ssrn com/abstract=3008621 All publications: