Solidarity within the Eurozone: how much, what for, for how long?
As Greece is about to benefit from a second European bailout plan, Sofia Fernandes and Eulalia Rubio propose clarification of the debate on the exercise of solidarity within the EMU, in a Policy Paper published by Notre Europe. They treat at the same time the short term issues – a way out of the crisis – and the long term ones – the reform of the EMU.
The first ten years of EMU passed by with no major debate on the solidarity implications of creating a common currency. Since 2010, however, the Eurozone debt crisis has forced member states to make some steps in the exercise of solidarity that were unimaginable just some years ago. This has prompted a sharp debate on what solidarity means in the context of the EMU and how much solidarity is needed to get out of the crisis.
This Policy Paper published by Notre Europe aims at shedding light on current discussions on the exercise of solidarity within the EMU. On the basis of a conceptual distinction between two logics, one based on reciprocity and the other based on enlightened self-interest, Sofia Fernandes and Eulalia Rubio review how the issues of solidarity were discussed at the moment of creating the EMU and how solidarity and coordination were practiced before the crisis. Then they analyse the way solidarity has been exercised during the crisis, and identify various factors which have severely hampered the efficacy of the EU solidarity efforts. Grounded on this analysis, they put forward some proposals on the type and amount of solidarity needed to exit from the current crisis as well as to build-up a sustainable and well-functioning EMU in the long term.