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Future of the Economic and Monetary Union of the EU

Experts from Portugal, Finland, Germany and Hungary discussed crisis management in the Eurozone and the challenges facing the Economic and Monetary Union in a roundtable discussion at the Institute for Foreign Affairs and Trade.

On February 7, 2019, the Institute for Foreign Affairs and Trade hosted a roundtable discussion on the future of the Economic and Monetary Union (EMU). Participants from Portugal, Finland, Germany and Hungary represented both the public sector and the academia, covering a wide array of approaches to the challenges facing the EMU.

In his keynote presentation, Mr. Zoltán Gyenes from the European Commission representation in Hungary highlighted the favorable macroeconomic figures and employment rates as indicators that the centralized monetary policy in the Eurozone is capable of providing answers to the challenges posed by the economic crisis. Ms. Paula Costa, representing the Portuguese Ministry of Finance, gave an account on the successful crisis management that Portugal achieved as a Eurozone country: since the conclusion of its participation in the European financial assistance program (EFSF) in 2014, it has been able to significantly reduce both its public deficit and its national debt. Ms. Costa, as well as Dr. Dániel Palotai, chief economist of the Hungarian Central Bank (MNB), emphasized that non-Eurozone Member States should be better involved in the designing of the European Stability Mechanism. Dr. Palotai came to this conclusion after summarizing the methods employed by the Hungarian Government to deal with the economic crisis, which included taxation reforms and the provision of credit to small and medium enterprises. Dr. Paweł Tokarski, senior researcher at the German Institute for International and Security Affairs (SWP), pointed out that Germany’s interests related to the EMU consist in guaranteeing the right level of conditionality and the integrity of the single market. Mr. Antti Ronkainen, from the University of Helsinki, formulated some criticisms on how the European Central Bank became the “servant of the euro” during the crisis, and, pointing to the prevailing difficulties of Italy and Greece, prompted the question whether there should be an exit mechanism from the Eurozone. The event was moderated by Tamás Levente Molnár, IFAT’s research fellow.