Charting Europe's Path Forward

The Peterson Institute for International Economics (PIIE) held a conference on “Charting Europe’s Path Forward” on February 13, 2018. The euro area and broader EU economies will continue to perform very well, and the continent’s political calendar gives voters a break from major elections. These circumstances offer a window of opportunity for material new European reforms to be agreed in the coming 18 months. The first part of the conference focused on new important research from PIIE on the realistic lessons from US economic history for Europe’s future integration. The second part was the North American launch of a new call to action by the team of Franco-German economists proposing necessary and feasible reforms of the euro area.

The new PIIE study, “Lessons for EU Integration from US History,” edited by Jacob Funk Kirkegaard and Adam S. Posen, offers many surprising hopes and cautions for the European Union upon taking the long views on the United States’ own integration. Kirkegaard and Posen led the first panel, on state building and the rise continental-scale fiscal institutions, followed by discussion with Harvard University professor Jeffry Frieden. For the second panel, Anna Gelpern and Jeremie Cohen-Setton focused on US lessons for the European banking union and regional convergence of business cycles, with Emory University professor Caroline Fohlin joining in the discussion panel.

In the second part of the program Nicolas Véron and Jeromin Zettelmeyer presented the main elements of the new Franco-German economists’ proposals for euro area reform that they were instrumental in preparing, “Reconciling risk sharing with market discipline: A constructive approach to euro area reform.” IMF European Department Deputy Director Mahmood Pradhan discussed, offering the first public IMF reaction to these fresh ideas, followed by Q&A with the audience.