Prof Paul De Grauwe COW 1.03

This course is available on the CEMS Exchange, IMEX Exchange, MPA in European Public and Economic Policy, MPA in International Development, MPA in Public Policy and Management, MPA in Public and Economic Policy, MPA in Public and Social Policy, MSc in EU Politics, MSc in EU Politics (LSE and Sciences Po), MSc in Human Resources and Organisations (International Employment Relations and Human Resource Management), MSc in Management, MSc in Management (CEMS MIM), MSc in Management (MiM Exchange), MSc in Political Economy of Europe, MSc in Political Economy of Europe (LSE and Sciences Po), MSc in Political Science and Political Economy and MiM Exchange. This course is available with permission as an outside option to students on other programmes where regulations permit.

A basic understanding of economic concepts is essential which is why the auditing of the EU409 Moodle course is highly recommended.

The purpose of this course is to analyse the process of European monetary integration and its implications for the institutions of economic governance in the EU. There will be a strong emphasis on using the experience of the financial and economic crises since 2008 as a source of evidence to assess both the performance of EMU and the theories about monetary integration. We consider the political and economic rationale for the establishment of EMU. We study the theory of optimal currency areas and its relevance today.  Indicative questions addressed in this course include: how and why did the EU develop the EMU project?; did economic theories prepare us for the Euro area crisis of 2010-12?; what are the challenges for member states in adjusting to the discipline of the 'Euro-zone'?; how does the Euro affect the ability of member states to adjust to periods of crisis and to external shocks?; is the sovereign debt crisis of 2010 indicative of imbalances within the EU and basic flaws in its institutional design? How can these design failures be corrected? What is the role of the ECB in this process? Is a fiscal union necessary to make a monetary union sustainable in the long run?

10 hours of lectures and 15 hours of seminars in the LT. 3 hours of seminars in the ST.

Students on this course will have a reading week in Week 6, in line with departmental policy.

One 1,500-word essay and one group essay of up to 3,000 words.

Paul De Grauwe (2016) The Economics of Monetary Union (Oxford University Press, 11th ed.); Kenneth Dyson and Kevin Featherstone (1999) The Road to Maastricht, OUP; Special issue (2006): 'Economic Governance in EMU Revisited', Journal of Common Market Studies vol.44, No.4 (November); DG Ecfin (2009) Economic Crisis in Europe: Causes, Consequences and Responses, European Economy 7/2009; Jean Pisani-Ferry (2014) The Euro Crisis and Its Aftermath, Oxford University Press.

Exam (100%, duration: 2 hours) in the main exam period.