Author(s): Pier Carlo Padoan
Date published: Feb 2019
SUERF Policy Note, Issue 55
by Pier Carlo Padoan, Italian Parliament
JEL-codes O3, O4, E6.
Keywords: Structural reforms, productivity, political economy, European Integration.
The EU needs a comprehensive reform agenda to deal with significant risks of further productivity decline and increasing fragility and fragmentation. However Europe lacks the political capital needed to implement the ongoing reform agenda (the “money agenda”) and introducing the, necessary, “growth” agenda. The situation is made more difficult by the fact that the growing populist/sovereign nationalist rhetoric identifies reforms with the “policy imposition” from Brussels. Hence resisting Europe and resisting reforms are equivalent. A “renewed” European agenda for inclusive growth can raise sufficient political capital to support the needed reforms by leveraging both the interaction between national and international bargaining processes (the two level game dimension) and the interaction between different policy agendas (the parallel game dimension).
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