Bodo Herzog,

University of Reutlingen, 

Germany,

E-mail: Bodo.Herzog@Reutlingen-University.de

Reforming the Eurozone: Assessment of the reform package by the European Commission – treating symptoms or root causes?

Abstract. The paper studies the reform package proposed by the European Commission on 6 December 2017. First, institutional and economic implications of the reform proposal are analysed. The paper finds that some proposals are beyond the present Treaty provisions. For instance, the proposal of a fiscal capacity does not tackle the economic root causes without a supranational transfer mechanism. In fact, the proposed budget neutrality over the medium-term is unfeasible due to cross-country heterogeneity in the Eurozone. At the end, the paper develops policy conclusions.

Received: May, 2018

1st Revision: August, 2018

Accepted: September, 2018

DOI: 10.14254/2071-789X.2018/11-3/4

JEL Classification: P16, Z13, G38, B53, E52, E62, H42

Keywords: EMU, reform, European Monetary Fund, economic governance