Iain Begg

• London School of Economics and Political Science

This Handbook provides a comprehensive analysis of the past, present, and future of the European Economic and Monetary Union in its broader context. It incorporates economic, legal and political science perspectives to provide an in-depth and forward-looking scrutiny of the rationales, the main features and the shortcomings of the economic, monetar...

This Element examines efforts to strengthen Economic and Monetary Union in the European Union, especially over the last decade, asking if enough has been done to render it more sustainable and resilient. Drawing on a survey of 111 leading experts on the economics and politics of EMU, this Element reviews the wide-ranging reforms undertaken since th...

Regional development is one of the main EU spending priorities through its Cohesion Policy. Brexit is among several influences on the future of the policy, whose evolution is part of a wider reshaping of the principles and practice of regional policy in Europe. In the context of emerging policy challenges and recent contributions to the regional po...

Since 1988, when the current EU Cohesion Policy was introduced, it has played an influential role in setting priorities for policies aimed at dealing with the effects of European economic integration on regional and social disparities. Although, latterly, the amount of money spent in the UK through the European Structural and Investment Funds (ESIF...

EU Member States, particularly in the euro area, have been pushed to adopt more extensive and intrusive fiscal rules, but,what is the evidence that the rules are succeeding?. The EU level Stability and Growth Pact (SGP) has been – and remains – the most visible rule-book, but it has been complemented by a profusion of national rules and by new prov...

This book brings together academics, members of European institutions, and regional and national level policymakers in order to assess the performance and direction of EU Cohesion policy against the background of the most significant reforms to the policy in a generation. Responding to past criticisms of the effectiveness of the policy, the policy...

This Riga Conference companion volume offers reflections on the complex developments and future of the broader TransAtlantic area. It focuses on four key themes: security in the Euro-Atlantic community and beyond, Russia-West relations, European order and economic sustainability, and the neighbourhood countries and beyond.

The European Union budget is small and fulfils only a limited range of functions, yet it provokes regular disputes among the Member States and institutions of the Union. This paper describes the structure of the budget and shows that standard theories, such as fiscal federalism, are not well-suited to analysing how the EU budget operates or the pol...

This paper considers what will be required to make Economic and Monetary Union (EMU) sustainable following the successive crises of recent years. It starts by laying out the policy benchmark, namely the successive ‘President Reports’ produced by EU institutions. It then suggests three dimensions of sustainable integration relevant to EMU, namely th...

The severity of the euro crisis has already led to a series of reforms in economic governance, but it is accepted that further reforms are needed to make the euro more robust and resilient to asymmetric shocks. Proposals put forward by the EU’s leaders to create a ‘genuine’ economic and monetary union, some of which have already been adopted, would...

The extensive economic governance reforms in the euro area since 2010 have put in place a system (EMU 2) that is intended to be more intrusive, prescriptive and enforceable in constraining Member State economic policies. It can be characterized as a recasting of the stability-orientated framework which is intended to correct the acknowledged shortc...

The financial, economic and debt crises in Europe have prompted a flurry of governance reforms, as part of which substantial changes in financial regulation and supervision have been undertaken. This chapter describes the evolution of the crises and discusses the constraints on EU action, including the difficult political context and the constituti...

Since the sovereign crisis erupted in the autumn of 2009 when the true scale of the Greek fiscal deficit was revealed, the European Union (EU), and especially the euro area, has staggered from crisis to crisis. Major initiatives have, however, been taken to improve economic governance and to put in place a more resilient framework for the euro. Thi...

European Banking Union - Focus: A Banking Union for Europe: Part of an Encompassing Long-term Governance Structure, No Short-term Fix (Christoph M. Schmidt and Benjamin Weigert) - Towards a European Banking Union (Ignazio Angeloni) - Banking Union: Inevitable, But Profoundly Challenging? (Iain Begg) - Banking Union in the Making (Stefano Micossi) -...

Over the next decade, the European Union will face multiple challenges in assuring growth and jobs, the response to which will call for a re-casting of the framework for the co-ordination of employment policy at EU level. Some of these challenges will arise from known drivers of change, while others will reflect the evolving nature of the EU econom...

Cohesion is an important EU policy domain that was originally primarily about regional development, but which has since acquired wider objectives. This article examines the definition of cohesion and how cohesion policy has evolved in the EU. It then looks at the impact of cohesion policy as a process in European integration, before focusing on pos...

The financial crisis has reopened debate on the architecture of financial regulation and prudential supervision in the EU, calling into question the home country control principle that has prevailed since the mid-1980s. This article discusses how the growth of cross-border financial intermediation can best be regulated to limit the ensuing risks of...

The way the EU budget is funded is often criticized, especially in the light of the increasingly complex devices used to limit net contributions. In addition to the formal UK rebate, there are reduced rates of take-up of different funding streams for certain other countries, all of which makes the funding side of the EU messy. Calls for the budget...

Labour market in the UK : myth and reality of the neo-liberal model The obvious decrease of unemployment from 1993 onward and the raise of the employment rate have established the UK as a key reference in the debates on employment. Many people choose the easy option and explain the UK’s good performances by the mere flexibility of its labour market...

Sweden, looking for its social model The Swedish economy has made a successful recovery from the deep recession it endured in the early 1990s, and has reshaped its social model in the process, to some extent returning to the successful Rehn-Meidner one that had been followed up to the 1980s. The social partners have a significant role in labour mar...

Globalisation is more an opportunity than a menace and the European social model is not doomed. Globalisation is not a zero-sum game but there are undeniably adverse consequences. As a phenomenon of the late 20th and early 21st centuries, there can be little doubt that globalisation is something that resonates widely. But it is not easy to pin down...

acceded Member States of central and eastern Europe (RAMs) 1 that joined the EU in 2004 have comfortably outpaced those of most of the EU-15. After the adverse shock of the early transition period when every country endured falling output and high inflation, most countries saw a bounce back in activity. This return of rapid growth in all the RAMs s...

Subsidiarity in the European Union, as the guiding principle of decision-making "close to the people", is often motivated and discussed from a predominantly political perspective. In this book, twenty-five renowned economic researchers and policy experts draw the demarcation between national and European policies from an economic viewpoint. Insight...

This study analyzes the effects of right-wing extremism on the well-being of immigrants based on data from the German Socio-Economic Panel (SOEP) for the years 1984 to 2006 merged with state-level information on election outcomes. The results show that the life satisfaction of immigrants is significantly reduced if right-wing extremism in the nativ...

Ten years on from its launch, it is clear that EMU, which has to be regarded as a more profound regime change than is often acknowledged, has had a pronounced effect on economic governance. As a framework for the conduct of macroeconomic policy, EMU has had undoubted successes in assuring price stability and in instilling greater fiscal discipline,...

Over the last two decades, there have been far-reaching transformations in the ways central banks operate, especially in regard to how openly they communicate with other actors. Transparency in central banking has two quite distinct motivations. The first is to provide a means of holding the central bankers to account, while the second is about the...

The re-launch of the Lisbon strategy in March 2005 was meant to inject a new momentum into what is now known as the Partnership for Growth and Jobs, and to highlight the challenges that Europe faces in responding to globalisation. More than two years on, it has become clear that most member states fully understand the need to adapt their economies...

Globalisation is one of the defining phenomena of today’s economy, albeit one that is loosely defined and prone to exaggeration. For many, globalisation is an opportunity, affording scope on the supply side for increased specialisation, enhanced diffusion of technology, and a competitive spur to innovation and productivity growth. Yet for others, g...

When Europe was Western Europe and socially rather cohesive, the question of economic integration through free market exchanges for labour, commodities and services was not a major problem. The integration of markets was hardly recognised as a real threat to social cohesion. Europe became EU27 and may become EU30: the economic market integration un...

Constitutionally, the new member states from east central Europe, like Sweden, have no choice about becoming full members of the Euro Area. They did not do so on joining the EU in 2004 only because the standard Maastricht conditions have to be fulfilled before they are eligible. Formally, therefore, they have derogations, with a trajectory for beco...

Ireland is no stranger to monetary union, having maintained parity with sterling between 1826 and 1979. When Ireland irrevocably fixed the external value of its currency, the punt, with those of ten other EU Member States on 1 January 1999, however, sterling continued to float. The continued absence of the United Kingdom (UK) from EMU creates an ad...

Our aim in this chapter is to set out the principal challenges facing macroeconomic policy in Stage 3 of EMU and to consider progress in meeting them thus far. The context for this evaluation springs mainly from the ‘Lisbon Strategy’ that was propounded at the Lisbon special European Council in March 2000 and re-launched at the 2005 spring European...

The ten new members that joined the EU in 2004 face a tantalising dilemma: should they aim to participate fully in Stage 3 of the euro as soon as possible, or retain monetary autonomy until their economies have adjusted more fully to the challenges of full EU membership? Plainly, their circumstances differ and, in many ways, these circumstances ref...

A constitution has two key functions: structurally it defines the institutions and the powers that they can exercise and substantively, it sets out key values and goals according to which those powers are exercised (Walker, 1996: 270). The articulation of values and goals institutionalises the underlying normative vision, but that vision alone cann...

Sweden has chosen a unique approach to joining Stage 3 of EMU, which is to agree to the principle of membership but to postpone actual entry until economic circumstances are appropriate. The other two countries among the EU members that have not joined Stage 3, Denmark and the UK, both have an opt out. They can stay out permanently if they wish. Sw...

Of the five Nordic countries only Finland has chosen to go into Stage 3 of Economic and Monetary Union from the outset. Sweden and Denmark, as members of the EU, could have joined if they had chosen, as they had no problem meeting the convergence criteria in 1998. Norway and Iceland of course were not eligible, as they were not members of the EU bu...

The achievement of EMU has been a slow and tortuous process. It has had to overcome significant political and social opposition, changing views on how to effect the shift from national currencies and policy systems to what is now in place, and vacillation over the institutional design. Today, the euro is taken for granted and the debate has moved o...

One of the most important and novel features of EMU as a policy system is the extent to which it relies on policy co-ordination. As explained in Chapter 1, this is a deliberate choice, motivated by a reluctance to push more powers upwards to the Community level in the wake of monetary union. EMU, however, means not just integration of the currency,...

A Member State that has adopted the euro, and which subsequently encounters macroeconomic imbalances that monetary policy cannot resolve, has to rethink its mix of fiscal and supply-side responses in the light of expectations about the stance of monetary policy. A key element of this is that policy has to adapt to a low inflation environment. If fi...

The most distinctive feature of the UK’s approach to EMU is its reluctance to participate. This ambivalence about the political and economic benefits lies behind the concession of an opt-out1 giving the UK the option not to join until it is ready to do so, negotiated as part of the December 1991 Maastricht agreement that paved the way for EMU. By c...

Although a vast amount of research went into prior assessments of how EMU would function and there was an abundance of theoretical work on what would shape outcomes, the empirical picture is, in some respects, quite surprising. From the vantage point of the early 1990s, for example, it might have been expected that Germany and its close neighbours...

Without Germany there simply would have been no monetary union. The pre-eminence of its economic policy framework during the post-war period made the Deutschmark the natural anchor currency for the Exchange Rate Mechanism and the Bundesbank provided the institutional blueprints for the ECB. Today Germany is much the largest economy in the euro area...

List of Tables List of Figures List of Boxes Abbreviations Acknowledgements Preface Notes on the Contributors Introduction PART 1: ADJUSTMENT AT THE EU LEVEL Macroeconomic Policy in the EMU The EMU Constitution Policy Co-ordination under EMU Structural Policies as a Means of Adjusting under EMU PART 2: ADJUSTMENT AT THE NATIONAL LEVEL The Early Yea...

In March 2005, the Lisbon strategy was re-launched as the Partnership for Growth and Employment and is now seen by many as the core ‘project’ of the Barroso Commission. The new approach has a number of innovations, notably the bringing together of previously fragmented policy-coordination mechanisms into a single National Reform Programme (NRP) for...

In March 2005, the Lisbon strategy was re-launched as the Partnership for Growth and Employment and is now seen by many as the core ‘project’ of the Barroso Commission. The new approach has a number of innovations, notably the bringing together of previously fragmented policy-coordination mechanisms into a single National Reform Programme (NRP) for...

Social justice is fundamental to the values that Europeans hold dear, as was clearly demonstrated in the conclusions of the 2000 Lisbon European Council at which the EU mapped out a way forward for its economic and social model. There are sound reasons for having social policy and for the central place that social protection occupies in European so...

In this important new study, Professor Iain Begg of the LSE examines for the Federal Trust a wide range of questions related to the European Union's budget. Taking as his starting-point the Union's current budgetary negotiations, Professor Begg gives a detailed analysis of the present state of the EU's finances and their likely evolution. He conclu...

The ECOFIN Council decision of November 2003 that noted the existence of ‘excessive deficits’ in France and Germany but did not impose sanctions on these two governments was widely interpreted as sounding the death-knell for the Stability and Growth Pact. A ruling by the European Court of Justice on 13 July 2004 annulled this decision, paving the w...

This chapter aims to provide fundamental information about the factors that influence the urban growth and competitiveness of cities in Great Britain. It describes the sources, nature, and location of economically successful towns and cities, and identifies the long-term winners and losers in the British urban system. The chapter evaluates the impa...

Introduction What factors underpin the competitive success or otherwise of different urban areas? This question, clearly, is central to any debate over the fortunes of different towns and cities in the British urban system. Taking a long-term view, over the past 50 years, say, some cities have consistently prospered, maintaining or increasing their...

In this article, Iain Begg assesses the EU budget package negotiated at the European Council in late March 1999. The agreement should see some evening-out of net contributions, an issue that had threatened to disrupt EU finances, with Denmark, France and Italy making bigger net payments. However, the changes that will be implemented for the next Fi...

Books reviewed: Lisa Conant - Justice Contained: Law and Politics in the European Union Kenneth Dyson - European States and the Euro: Europeanization, Variation and Convergence Karen J. Alter - Establishing a Supremacy of European Law: The Making of an International Rule of Law in Europe Vivian Ann Schmidt - The Futures of European Capitalism Amy V...

Under EMU, the less competitive regions of the EU--usually assumed to be peripheral--have been widely expected to lose ground, yet it is the core of the EU that, so far, has appeared to have suffered from the advent of the euro. This paper looks at the processes behind regional divergence in the EU, and presents evidence on recent and prospective t...

There are differing views about the need for economic policy coordination in the EU and about the adequacy of the system that has evolved under EMU. This article examines the case for such policy coordination, then describes and assesses the current arrangements for both ‘hard’ coordination - epitomised by the much-maligned Stability and Growth Pac...

This paper calculates indices of central bank autonomy (CBA) for 163 central banks as of end-2003, and comparable indices for a subgroup of 68 central banks as of the end of the 1980s. The results confirm strong improvements in both economic and political CBA over the past couple of decades, although more progress is needed to boost political auton...

Since the mid-1990s, several steps have been taken towards an integration of social policy in the EU. Yet there is reluctance in many quarters to go further. This article introduces the special issue on integration of EU social policy and explores the case for more comprehensive `Europeanization'. We argue that the norms that underlie the European...

Introduction The UK is a heavily urbanised and, compared with most of the other OECD countries, very densely populated country. Moreover, in some parts of the country, large and small cities are clustered close together, notably in the central belt of Scotland, the heartland of England from Liverpool in the west to Hull in the east, and around Lond...

This article proposes and develops a concept - investability - that can be used for analysing the competitive position of cities or regions, and formulating policy responses. It can be defined as conditions that are conducive to a higher level of investment and refers principally to the business environment in which economic agents operate. The pap...

The move to monetary union has been criticized by many economists and the weak performance of the euro on the foreign exchange markets between 1999 and 2001 has tended to reinforce these doubts. Yet in many respects the introduction of the euro has been a success, even though the EMU policy framework remains to be completed. This paper looks at the...

This book is structured into seven chapters, in each of which the key mechanisms are presented, the evidence is reviewed, the implications for policy are explored and areas for future research are outlined. An introductory chapter sets the scene by discussing the definitions of the economic and social components of cohesion, and documenting the ext...

Since the signing of the Maastricht Treaty, the EU has paid increasing attention to employment creation, yet has few formal powers in this area. A series of agreements, known as “processes” and named after the city where they were agreed, has been made to co-ordinate employment policy. This paper will examine how the “Luxembourg processes,” under w...

In the early morning of 26 March 1999, the EU’s heads of state and of government emerged from a marathon meeting to unveil the Financial Perspective for the period 2000-2006. Six weeks later, the deal was formally approved by the European Parliament by a 2-1 majority. The outcome should, therefore, be that the EU’s finances are secure for the next...

Improved competitiveness, as we all know, is the path to economic nirvana. Plainly, it is a sought after property of any economy: the term trips frequently off the lips of politicians and commentators on economic and business matters. As cities increasingly engage in competition with one another at different levels, the determinants of competitive...