The European response to sudden changes in 1990's was, on the one hand, to broaden (by expanding the EU territorially to encompass the countries in Eastern Europe) and to deepen (via a monetary union, policy coordination proposed by the stability and growth pact and continuing single market initiatives) the integration processes initiated in 1950's. However, these policies created new economic policy challenges as well. The expansion of EU membership from 12 countries in 1990 to 27 countries today raised issues of governance, inequalities in the levels of economic and social development, productivity and real convergence processes. The enlarged EU became more diverse economically, culturally and socially and to a degree politically. Deepening processes -- especially the monetary unification -- appeared to be successful in its first decade of existence. However, the financial crisis revealed also potential weaknesses of the monetary union. There is a danger that the financial crisis will slow down the dynamics of the European integration process, both including its former trend to deepen and expand, and that it will strengthen the inward-looking policies of the European Union.
Past heritage meets today future challenges and they determine jointly the shape of world economy. The increasing role of large emerging economies in the world economy affects the individual member states of the EU differently. Some countries experience expanding trade opportunities, whereas other countries encounter increasingly vigorous competition for their exports. That indeed will present great challenges for monetary (i.e. exchange and interest rates) policies in the monetary union. Demographic trends interacting with past social policies may be a key restriction for implementation of tight fiscal policies which are necessary for stabilization of public finances. The coordination of financial regulation can counteract national interests, while it is a necessary precondition for the preservation (and expansion) of the monetary union.
These issues will be address by the research and analysis at the conference. Especially (but not exclusively) the following questions will be discussed:
- Topic 1: Monetary Union: Engine of convergence or source of divergence?
- Topic 2: Fiscal History: How did we get where we are?
- Topic 3: Fiscal Future: Economic policies (increasingly fiscal union and financial integration) versus national autonomy (demographic, political, social, and cultural tradition).
- Topic 4: Future monetary dilemmas: different impacts of changing world economy on the competitive positions and economic performance of individual Eurozone members.
- Topic 5: Fiscal policy and macroeconomic and financial volatility.
- Topic 6: Trade competition with emerging economies and its implications for openness.