Rules, Imbalances and Growth in the Eurozone

This paper highlights the rules and institutions that have characterized the European Monetary Union during its prolonged crisis and discusses the policies implemented in the Eurozone, stressing the limits of the strategy pursued by the European authorities. It also examines the issues of current account imbalances, economic growth and the problem of debt, and their interconnections. The main purpose of the paper is to indicate some economic solutions and political arrangements in order to complete the institutional system of the EMU. This requires appropriate reforms of its institutional architecture, where a key point is fiscal union. But such reforms require changes in the treaties in order to make the Eurosystem more consistent and endowed of democratic legitimacy, so to have the tools, resources and policies necessary to contribute to the development, stability and cohesion of the Eurozone countries.