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PROGRESS THROUGH CRISIS? ISIS? R PROCEEDINGS OF THE CONFERENCE FOR THE GH C 20TH ANNIVERSARY OF THE ESTABLISHMENT ROU OF THE EUROPEAN MONETARY INSTITUTE H T ESS R G PRO NTRAL BANK E AN C E Ivo Maes and EUROP Frank Moss (eds.) PO R GRESS THROUGH CRisis? PROCEEDINGS OF THE CONFERENCE FOR THE 20TH ANNIVERSARY OF THE esTABLISHMENT OF THE EUROPEAN MONETARY INSTITUTE Ivo Maes and Frank Moss (eds.) © European Central Bank, 2014 Address Kaiserstrasse 29 60311 Frankfurt am Main Germany Postal address Postfach 16 03 19 60066 Frankfurt am Main Germany Telephone +49 69 1344 0 Website http://www.ecb.europa.eu All rights reserved. Reproduction for educational and non-commercial purposes is permitted provided that the source is acknowledged. ISBN 978-92-899-1397-3 (print) ISBN 978-92-899-1398-0 (epub) ISBN 978-92-899-1396-6 (online) EU catalogue number QB-04-14-664-EN-C (print) EU catalogue number QB-04-14-664-EN-E (epub) EU catalogue number QB-04-14-664-EN-N (online) CONTENTS FOREWORD by Ivo Maes and Frank Moss ������������������������������������������������������������������������������� 5 LIST OF CONTRIBUTORS ��������������������������������������������������������������������������������������7 INTRODUCTION by Luc Coene ������������������������������������������������������������������������������������������������������13 1 THE TURBULENT 1990S: LESSONS FOR THE PRESENT? Maastricht and the crisis in Europe: where we’ve been and what we’ve learned by Reza Moghadam ���������������������������������������������������������������������������������������������19 The EMS crisis of the 1990s: parallels with the present crisis? by Daniel Gros ����������������������������������������������������������������������������������������������������29 From the Maastricht Treaty to the euro: an economic and fiscal policy perspective by Thomas Wieser and Wim Haine ��������������������������������������������������������������������45 Financial crises under two European monetary regimes: EMU vs� EMS by André Sapir ����������������������������������������������������������������������������������������������������53 11 THE CONTRIBUTIONS OF THE EMI IN THE LIGHT OF THE PRESENT CRISIS From the Maastricht Treaty to the euro: the role of the EMI by Robert Raymond ���������������������������������������������������������������������������������������������71 The quest for sustainable convergence in EMU: the EMI’s convergence assessments by Frank Moss ����������������������������������������������������������������������������������������������������79 The design of the ECB’s toolbox: fitting the EMI blueprint into a deeper EMU by Hanspeter Scheller ���������������������������������������������������������������������������������������113 The evolution of the euro area policy framework: some considerations by Marco Buti ���������������������������������������������������������������������������������������������������129 111 FROM THE EMI TO EMU AND BEYOND Presentation of the book “Alexandre Lamfalussy: The Wise Man of the euro” (by Christophe Lamfalussy, Ivo Maes and Sabine Péters) by Jacques de Larosière �����������������������������������������������������������������������������������135 Improving the European governance: towards an economic and fiscal federation by exception by Jean-Claude Trichet �������������������������������������������������������������������������������������139 Financial integration and banking union by Mario Draghi �����������������������������������������������������������������������������������������������151 CONCLUDING REMARKS by Alexandre Lamfalussy ����������������������������������������������������������������������������������161 3 FOREWORD January 2014 marked the 20th anniversary of the establishment of the European Monetary Institute, the predecessor of the European Central Bank. On 12 February 2014, the European Central Bank and the National Bank of Belgium co-hosted a conference in Brussels to commemorate this key milestone on the way to Economic and Monetary Union. This book brings together the papers presented at the conference which was entitled “Progress through crisis? Conference for the 20th anniversary of the establishment of the European Monetary Institute”. The aim of both the conference and this volume was not only to celebrate the anniversary and honour Alexandre Lamfalussy, the first President of the EMI. It was also intended to draw parallels between how the lessons from the crisis of the 1990s had influenced the progress towards EMU and how the recent euro area crisis was holding lessons for the future functioning of EMU. As such, it offered an occasion to assess how some of the past experiences remained relevant for the future, very much in the spirit of Alexandre Lamfalussy, the prototype of the forward-looking central banker. Naturally, we would like to thank all the persons who contibuted to the successful conclusion of this project, both for the organisation of the conference and the preparation of this volume. Ivo Maes Frank Moss July 2014 5 LIST OF CONTRIBUTORS Marco Buti Marco Buti, educated at the Universities of Florence and Oxford, joined the European Commission in 1987. He was economic advisor of the Commission President until 2003; from September 2003 to August 2006 he was Director of Economies of Member States at the Directorate-General for Economic and Financial Affairs where, as from 1 September 2006, he has been appointed Deputy Director General and, since December 2008, Director General. He has been visiting professor at the Université Libre de Bruxelles, the University of Florence and at the European University Institute. He has published extensively on EMU, macroeconomic policies, welfare state reforms, European unemployment. Luc Coene Since 1 April 2011, Luc Coene has been governor of the National Bank of Belgium, as well as a member of the Governing Council and the General Council of the European Central Bank. He is also a director at the Bank for International Settlements and has a seat on the G10 Board of Governors. He has been a Minister of State since 2003. Mr. Coene obtained a degree in Economics at the Rijksuniversiteit Gent and a post-graduate diploma in European economic integration at the College of Europe in Bruges. He began his career in 1973 at the National Bank of Belgium, where he worked successively in the Research and Foreign Departments. In 1979, he became the assistant of the Belgian Administrator at the International Monetary Fund. He came back to Belgium in 1985, first as deputy chef de cabinet to the Minister of Finance, and then as chef de cabinet of the Deputy Prime Minister and Budget Minister. He was an Economic Adviser at the European Commission (DGII) from 1989 to 1992. In 1995, he became a senator and, in 1999, the Prime Minister’s chef de cabinet and Secretary to the Council of Ministers. In 2003, he was appointed vice-governor of the NBB. Jacques de Larosière Former Undersecretary of Monetary Affairs: French Treasury (1974-1978). Former Managing Director of the IMF (1978-1987). Former Governor of the Banque de France (1987-1993). Former President of the European Bank for Reconstruction and Development (1993-1998). Chairman of the high level committee on the reform of the European financial supervisory architecture (2008-2009). Advisor to the Chairman of BNP Paribas (1998-2009). Chairman of Eurofi (2000- ). Member of the G30. Chairman of the “Observatoire de l’Epargne Européenne (1999 - ). Chairman of the Strategic Committee of the Agence France-Trésor (2004 - ). Member of the “Académie des Sciences Morales et Politiques” of the Institut de France. Grand Officier of the Legion d’Honneur, KBE. Member of the French Society of the Cincinnati. Mario Draghi In his capacity as President, Mario Draghi chairs the Executive Board, the Governing Council and General Council of the European Central Bank, and is LIST OF CONTRIBUTORS 7 also the Chair of the European Systemic Risk Board. He is also a member of the Board of Directors of the Bank for International Settlements. From 2006 to October 2011 he served as Governor of the Banca d’Italia. In April 2006 he was elected Chairman of the Financial Stability Forum (later the Financial Stability Board), and served in that function until November 2011. He graduated from the Sapienza University of Rome in 1970 and received his PhD in Economics from the Massachusetts Institute of Technology in 1977. Between 1975 and 1981, he was Professor of Economics at the universities of Trento, Padua and Venice, and from 1981 to 1991 he served as Professor of Economics at the University of Florence. Prior to taking the helm of the Banca d’Italia, he was Vice Chairman and Managing Director at Goldman Sachs International, and a member of the firm-wide Management Committee (2002-2005). He was Director General of the Italian Treasury (1991-2001), Chairman of the European Economic and Financial Committee (2000-2001), and Chairman of the OECD’s Working Party No 3 (1999-2001). In 1993 he was appointed Chairman of the Italian Committee for Privatisations and from 1984 to 1990 he was an Executive Director of the World Bank. Daniel Gros Daniel Gros has been the Director of the Centre for European Policy Studies (CEPS) since 2000. Among other current activities, he serves as adviser to the European Parliament and is a member of the Advisory Scientific Committee of the European Systemic Risk Board (ESRB) and the Euro 50 Group of eminent economists. He also serves as editor of Economie Internationale and International Finance. Gros holds a PhD.
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