IPP Policy Brief 11, Reform of the euro area: a Portuguese comment on a Franco-German proposal, comes after the publication of a recent article by a group of well-known French and German economists, with proposals to change the rules and institutions of the euro area. This brief presents a number of constructive comments on this Franco-German proposal by three Portuguese economists, namely Miguel Faria-e-Castro (economist at the Federal Reserve Bank of St. Louis), Ricardo Reis (professor at the London School of Economics) and Ricardo Cabral (U. Madeira professor and director of the Institute of Public Policy).
The Policy Brief focuses on the macro-financial aspects of the original proposal, where recommendations are discussed to improve banking regulation, financial market stability and debt solvency crisis management, whose relevance to Portugal is unavoidable. Despite extensive technical and political debate, the authors note that member states have still not been able to agree on significant steps forward, always seeming to lack political conditions. “In 2016, it was Brexit. In 2017, elections in France and Germany. 2018 seems to be a “window of opportunity,” but an implementable commitment remains to be achieved.”
The brief is divided into three strategic objectives, each one being approached by a different author.
Through the implementation of this Policy Brief, the authors intend to contribute to draw attention to the reform of the euro area in the public debate in Portugal and thus stimulate reflection and discussion on a fundamental and urgent theme.