The Future of the Eurozone; Nation Building in Times of Crises.

The Economic and Monetary Union was set up in the aftermath of the end of Cold War. A historic step to intertwine the economic and political fates of European nations. After a period of strong growth, the financial crisis and subsequently the debt crisis exposed fundamental design flaws. Many institutional shortcomings have been corrected but the process consumed both time and political capital. Having strengthened the fiscal framework, and after setting up the European Stability Mechanism, the establishment of a Banking Union has been key in regenerating growth throughout the Eurozone. While in some member states legacy issues are still being dealt with, next steps to strengthen the Monetary Union are needed. The completing of the Banking Union is key but for the competitiveness of the Eurozone creating strong and integrated capital markets is perhaps even more important. Serious initiatives on a Eurozone budget are currently discussed. Within member states further structural reforms are needed whilst sovereign debt needs to be reduced to create fiscal space for future economic shocks. And all this in a climate of rising populism, both inside (Italy) and outside (Hungary, UK, US) the Eurozone. It’s truly “nation building in times of crises”.