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The European Commission has set some more ambitious objectives: a new directive aims to improve access to payment accounts, boost transparency of account fees and make it easier to switch accounts in the EU. That sounds promising initially – however, as is so often the case, “well intentioned” is not the same as “well executed”. Fundamentally different market realities in the member states and several quite complex issues make it difficult to define appropriate rules at the EU level.
The current crisis has demonstrated that the eurozone is still a very heterogeneous economic area. As the common monetary policy cannot stabilise a country which experiences an asymmetric shock, there is a growing debate about whether the architecture of the eurozone needs to be complemented by fiscal stabilisation instruments. While the synchronisation of business cycles and an effective absorption of regional shocks would be in the interest of all the euro countries, the main question is how this could be put into practice without creating undesirable incentives. After all, a deeper fiscal integration would hardly be manageable without redistribution components.
Men and women differ when it comes to ownership of financial products. This is reflected in various analyses as well as in survey data for the European Union. Based on the latter, several interesting patterns can be observed.
The next multiannual financial framework of the European Union (2014-2020) allows disbursements to be partially linked to economic conditions in order to enhance the effect of these funds by preparing the right economic framework. However, time inconsistencies and a low probability of sanctions make these instruments less effective. These first approaches to conditionality under the MFF should be further developed and extended to other instruments of the Union such as the ESM, the fiscal compact and other mechanisms of economic policy coordination.
European youth are increasingly bearing the brunt of the crisis. In January 2013, the average unemployment rate in the EU of those aged 16 to 24 reached 23.6%. The inglorious frontrunners are Greece and Spain with more than 55%, but also in Italy and Portugal almost 40% have no job. The absolute numbers are just as distressing. There are 7.5 million NEETs (Not in Employment, Education or Training) below the age of 25, and 6.5 million more between 25 and 29.
Shortly before Christmas, the EU finance ministers and heads of state and government agreed upon a compromise on the establishment of an EU banking union. In doing so, they managed to meet their self-imposed year-end deadline. Unfortunately, this came at the price of a useless compromise that lacks conceptual consistency.
For the EU members that have ratified it, the Fiscal Compact is set to come into force at the beginning of 2013. Among other things, the signatories to the Compact pledge to introduce a debt brake at the national level by 2014. Our progress report shows that numerous euro countries have already implemented debt brakes, five of which have constitutional status. Others, by contrast, still have to provide evidence that they are serious about the institutional anchoring of sound fiscal policy.
Since the start of 2011 the financial and sovereign debt crises have forced roughly half the governments in the euro area to accept a premature end to their term of office. So far, the elections in the crisis countries have established the conservative camp as the clear winner at the polls. The established major parties continue to dominate the political system in many countries. Nevertheless, the electoral successes of right-wing populist and newly established left-wing factions may hamper the formation of properly functioning governments in future. If the economic outlook for the young generation does not improve, this trend could continue.