How should better governance of the EMU look like? (Part I and II)

Last week, at the margins of the latest EU summit, a high level meeting took place between Greek Prime Minister Alexis Tsipras, German Chancellor Angela Merkel, French President François Hollande and the four authors of a paper that a reader of flassbeck-economics kindly brought to our attention. The four authors in question comprise the very top of European governance: the President of the European Commission Jean-Claude Juncker, the President of the European Council Donald Tusk, the President of the Euro Group Jeroen Dijsselbloem and the President of the European Central Bank, Mario Draghi.

The paper, which bears the title 'Preparing for Next Steps on Better Economic Governance in the Euro Area,' was meant to form the basis for a discussion at the informal meeting of the European Council on 12 February. It shows the direction that the politicians at the highest levels of the European institutions want to take in order to solve the euro crisis. Although the nine page hand-out somewhat modestly is called 'An Analytical Note,' it is undoubtedly a very important document, given the prominence of its signatories. It reflects the political preferences and the intellectual backgrounds of the authors (and their staff) and it makes clear how they plan to approach the Greek crisis and the crisis of the euro in general. Given the importance of this text, one would expect a thoroughly researched document, written in precise language and leading to clear and logical conclusions. However, nothing is further from the truth.