EU policy and economic governance

Rooted in the 1957 Treaty of Rome, the common market and the institutional framework that made it possible remain pivotal within the EU today. Initiatives such as the Single European Act of 1987 and the Maastricht Treaty of 1992 aimed to solidify the common market and bolster the EU's role in the global economy, symbolised by the introduction of the euro as a potential competitor to the US dollar. Nevertheless, a series of challenges including the 2008 financial crisis, the subsequent euro crisis, Brexit, the pandemic, the economic downturn resulting from the war in Ukraine, and the rise of China, have profoundly tested the pillars of economic governance in Europe. This course will investigate these challenges and the EU's responses to them in order to assess its current standing and future outlook, both domestically and internationally.

The course will explore the breadth of EU activities across major policy domains, such as the common market, internal market regulation, the euro and economic and monetary union, the size of the EU budget, its sources of revenue and how it is spent on agriculture or cohesion. It will also review international trade and development policies, as well as EU democracy, enlargement and reform. For each EU policy under examination we will start by analysing its impact on different stakeholders, such as domestic and foreign producers, consumers, employers or workers, in order to identify the relevant actors, interests and conflicts at play. Does European intagration favour the centre at the expense of the perifery? Is the EU budget regressive? To what extent does joining or leaving the EU divert or create trade from third countries? Next, we will delve into the current institutional framework that shapes the interaction of all those conflicting interests, in order to understand the results of the policy process. Why has the stability and growth failed to maintain fiscal discipline in the Euro area under the reference targets? Why does Google invest so much in small peripheral countries such as Ireland or Portugal? Why is it so difficult to finalise a trade deal with Mercosur? Why has the signing of a trade agreement with the EU started a civil war in Ukraine in 2014? Why does Europe have a rising number of refugees? Finally, we will compare actual policy outcomes with those that would take place under different institutional settings in order to understand not only the reasons for the current economic governance structures but also existing debates and the prospects for future reform. What would happen if ECB governors were elected for life? What would happen if the EU were allowed to run deficits? What would happen if the commission president were directly elected? What would happen if the EU were to accept Ukraine or Turkey as members? What would happen if Germany were to leave the Euro area? What would happen if the digital euro were to replace existing money for everyday transactions? What would happen if the EU were allowed to set tariffs on energy imports? What would happen if the EU budget were to be approved by majority?

By the end of this course, students should be able to understand the economics behind major EU policies, the issues at stake and the conflicts they generate both domestically and internationally among state and non-state actors. They will also understand the institutional rules of the game that shape political interactions among all those interests, and contribute decisively to determining who runs the European economy. Finally, they will become aware of current debates about the reform of economic governance in the EU, which will help them foresee its future evolution and scope. Furthermore, the curriculum will introduce students to public policy analysis and institutional design, which may serve as a stepping stone for further academic pursuits or be directly transfered into non-academic careers.