The 26th Barcelona GSE Lecture was delivered at Banc Sabadell Auditorium on March 19, 2013 by Prof. Jacques Drèze, Professor at CORE (Université Catholique de Louvain) and member of the Barcelona GSE Scientific Council.
Professor Drèze presented a lecture entitled, "Fiscal Integration and Growth Stimulation in Europe: Three Policy Proposals." In the lecture, Prof. Drèze detailed three proposals aimed at completing the economic integration of the European Monetary Union (EMU), which he believes is necessary in order to guarantee the viability of the monetary union:
- International sharing of macroeconomic risks through mutual insurance
- Growth stimulation through international public investment programs
- Issuance by EMU countries of sovereign debt indexed on national incomes
Professor Drèze noted that some institutional requirements would need to be fulfilled in order to implement such economic policies across the euro area:
- An “Economic Council of the Euro Area” bringing together governmental representatives of the euro area Member States, along the lines of the Euro Group
- A “Euro Area Economic Directorate” whose professional staff would assist the Council towards defining policies and implementing them, along the lines of the EFC
- A “Eurozone Economic Research Unit” (possibly integrated in the Joint Research Center of the Commission), in charge of mid-to-long term forecasts of national incomes, of desired levels of demand stimulation, of specific investment projects and their funding, and the like
- A “Eurozone Council of Economic Advisers” modelled after the US Council though perhaps somewhat less ambitious budgetwise. This could be a welcome step towards closer cooperation between academic and staff economists, which remains underdeveloped in Europe.
He believes that the recent creation of the EMU Summit, chaired by Herman van Rompuy, provides the key institution needed to guide the process. He also argues that the delays inherent in implementing some of the policies he suggests are no reason to discard them.
"We regard these items as indispensible, permanent improvements – and crucial strengthening – of the EMU structure that need to be thought through in depth and promoted with vigor," Prof. Drèze said. "The fact that delays are involved leads to a clear conclusion: let us start at once, without wasting a minute!"