Missing elements of a “federal EMU”

Marius SkuodisInstitute of International Relations and Political Science, Vilnius University

Presentation for the international conference “The Future Prospects of Latvia Within the EU’s Development: Discussions on Federalism and Its Meaning in Society”, Riga, 1 November 2013.

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• Do we need a federal EU?• The weakest component of “federal EMU” reforms;• A practical case: creating the banking union.

Outline

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The euro crisis: do we need a federal EU?

Uneven integration

Uneven integration

Ineffective rules

Ineffective rules

Insufficient quality of

governance

Insufficient quality of

governance

National banking sector

National banking sector

EU level causes

National level causes

Towards a federal EU

Incremental change

Type of reforms

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The weakest component of “federal EMU” reforms: political integration

Supranational decision-making

Collective ownership and responsibility

Towards a federal EU

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Three pillars of the banking union

Single Supervisory Mechanism

Single Supervisory Mechanism

Single Resolution Mechanism

Single Resolution Mechanism

Single deposit

guarantee framework

Single deposit

guarantee framework

Single rulebook

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Redistributive policy before political integration: towards an incomplete federal framework?

SSM – November

2014

SSM – November

2014

SRM – recent

proposal

SRM – recent

proposal??

Negotiations on the single rulebook

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• Debates on the need for bigger economic and political integration vs. incremental institutional improvements are not yet finished;• The weakest component of “federal EMU” reforms is how to increase collective ownership and responsibility for supranational decision-making;• The banking union indicates that reforms involving redistribution cannot go before political integration.

Conclusions

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Thank You!