Preface
1Leonard, M., Why Europe will run the 21st Century, Public Affairs (2005)
1 If the euro fails, Europe fails
1Meyer, T., Der Geuro: Eine Parallelwährung für Griechenland? (in German), Deutsche Bank, May 2012, available at: www.dbresearch.de/PROD/DBR_INTERNET_DE-PROD/PROD0000000000288868.pdf. Some of Meyer’s arguments are reported in Business Insider, available at: www.businessinsider.com/introducing-the-geuro-a-new-parallel-currency-to-solve-all-of-greeces-problems-2012-5. Meyer himself sets out some of his views in this piece for the Wall Street Journal, available at: online.wsj.com/news/articles/SB10001424127887324556304578116830518460210
2Roger Bootle et al., Leaving the Euro: A Practical Guide, Capital Economics, revised submission to the 2012 Wolfson Prize. This and other submissions are available at: www.policyexchange.org.uk/images/WolfsonPrize/wolfson%20economics%20prize%20winning%20entry.pdf
3See “Tempted, Angela?” at www.economist.com/node/21560269
4See page 22 of Gill, I.S. and Raiser, M., Golden Growth: Restoring the Lustre of the European economic model, World Bank, 2012 (overview) http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/11/15/000442464_20131115123906/Rendered/PDF/681680PUB0v10G00Box379791B00PUBLIC0.pdf
2 From the origins to Maastricht
1Churchill Zurich speech available at: www.churchill-society-london.org.uk/astonish.html
2Schuman speech available at: europa.eu/about-eu/basic-information/symbols/europe-day/schuman-declaration/
3European Coal and Steel Community available at: europa.eu/legislation_summaries/institutional_affairs/treaties/treaties_ecsc_en.htm
4Quoted by Otmar Issing, July 2nd 2013, available at: www.project-syndicate.org/commentary/the-risk-of-european-centralization-by-otmar-issing
5See Dell, E., The Schuman Plan and the British Abdication of Leadership in Europe, Oxford University Press, 1995, p. 169.
6Quoted in In with the Euro, Out with the Pound by Christopher Johnson (Penguin Books, 1996).
7Crafts, N., Saving the Euro: a Pyrrhic Victory, available at: www.chathamhouse.org/publications/papers/view/195771
8This story is told in The Official History of Britain and the European Community, Volume II by Stephen Wall (Routledge, 2013).
9This section has drawn on Making the European Monetary Union by Harold James (Harvard University Press, 2012) and The Euro: the Battle for the New Global Currency by David Marsh (Yale University Press, 2011).
10Mundell, R., A Theory of Optimum Currency Areas, available at: www.aeaweb.org/aer/top20/51.4.657-665.pdf
11Report of a study group on the role of public finance in European integration, available at: ec.europa.eu/economy_finance/emu_history/documentation/chapter8/19770401en73macdougallrepvol1.pdf
12The story of the single market and the path to 1992 is told in Europe Relaunched: Truths and Illusions on the Way to 1992 by Nicolas Colchester and David Buchan (Hutchison, 1990).
13David Cameron, speech to World Economic Forum in Davos, January 26th 2012, available at: www.politics.co.uk/comment-analysis/2012/01/26/david-cameron-s-davos-speech-in-full
14“Banking on a crisis?”, The Economist, October 29th 1998, available at: www.economist.com/node/174327
15Reported in www.causeur.fr/%C2%AB-on-ne-rejette-pas-platon-%C2%BB,12999
3 How it all works
1Appendix 2 summarises the main treaties, regulations and pacts governing the European Union and the euro.
2This section has drawn on the two best general guides to the European Union: The Penguin Companion to European Union by Anthony Teasdale and Timothy Bainbridge (4th edition, Penguin, 2012) and Guide to the European Union by Dick Leonard (10th edition, Profile Books, 2010 – 11th edition due in 2014). See also The Passage to Europe by Luuk van Middelaar (Yale University Press, 2013), especially for the early years of the European project.
3The argument was set out in “The Stability Pact: More than a Minor Nuisance” by Barry Eichengreen and Charles Wyplosz in Begg, D. et al. (eds), EMU: Prospects and Challenges for the Euro, Blackwell, 1998.
4See “Farewell to the stupidity pact”, October 22nd 2002, available at: www.economist.com/node/1402102
5The story of the constitutional treaty is told in two books: The Accidental Constitution by Peter Norman (Eurocomment, 2005) and The Struggle for Europe’s Constitution by Andrew Duff (Federal Trust, 2005).
6On the British budget question, see among others, A Stranger in Europe by Stephen Wall (Oxford University Press, 2008) and Britain’s Quest for a Role by David Hannay (I.B. Tauris, 2013).
4 Build-up to a crisis
1Gill, I.S. and Raiser, M., Golden Growth: Restoring the Lustre of the European economic model, World Bank, 2012, see www.worldbank.org/en/region/eca/publication/golden-growth
2Gros, D., Will EMU survive 2010?, Centre for European Policy Studies, 2006, available at: www.ceps.be/ceps/dld/3059/pdf
3Tilford, S., Will the Eurozone Crack?, Centre for European Reform, September 2006, available at: www.cer.org.uk/sites/default/files/publications/attachments/pdf/2011/p_688_eurozone_crack_42-892.pdf
4Veron, N., Is Europe Ready for a Major Banking Crisis?, Bruegel, August 2007, available at: www.bruegel.org/download/parent/234-is-europe-ready-for-a-major-banking-crisis/file/659-is-europe-ready-for-a-major-banking-crisis-english/
5EMU@10: Successes and challenges after ten years of Economic and Monetary Union, European Commission, available at: ec.europa.eu/economy_finance/publications/publication12682_en.pdf
6Delors, J., Report on economic and monetary union in the European Community, April 1989, available at: ec.europa.eu/economy_finance/publications/publication6161_en.pdf
5 Trichet’s test
1Article 125: “A Member State shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of another Member State, without prejudice to mutual financial guarantees for the joint execution of a specific project.”
2Article 122.2: “Where a Member State is in difficulties or is seriously threatened with severe difficulties caused by natural disasters or exceptional occurrences beyond its control, the Council, on a proposal from the Commission, may grant, under certain conditions, Union financial assistance to the Member State concerned. The President of the Council shall inform the European Parliament of the decision taken.”
3The details were reported by the Wall Street Journal more than three years after the event, based on a leak of the board minutes, see: online.wsj.com/news/articles/SB10001424052702304441404579119180237594344. The excerpts from the minutes are worth reading at: blogs.wsj.com/economics/2013/10/07/imf-document-excerpts-disagreements-revealed/
4An account of the ECB’s actions in this key weekend of May 2010 is given in The Alchemists: Three Central Bankers and the World on Fire by Neil Urwin, Viking Press, 2013. An extract was printed by the Washington Post at: www.washingtonpost.com/business/three-days-that-saved-the-world-financial-system/2013/03/28/d5b9a38c-94ef-11e2-b6f0-a5150a247b6a_print.html
5“E-Bonds would end the crisis”, op-ed in the Financial Times, available at: www.ft.com/cms/s/0/540d41c2-009f-11e0-aa29-00144feab49a.html#axzz2mdxfF3bW
6 Super Mario
1“Standard & Poor’s Takes Various Rating Actions On 16 Eurozone Sovereign Governments” January 13th 2012, available at: www.standardandpoors.com/ratings/articles/en/us/?assetID=1245327295020
2Towards a Genuine Economic and Monetary Union, available at: ec.europa.eu/economy_finance/crisis/documents/131201_en.pdf
3Euro Area Summit Statement, June 29th 2012, available at: www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/131359.pdf
4Berlusconi denies describing the chancellor as una culona inchiavabile (an “unfuckable fat-arse”), though his supporters are happy to allude to the term. See Il Fatto Quotidiano at: www.ilfattoquotidiano.it/2011/09/10/cucu-la-merkel-e-%E2%80%9Cinchiavabile%E2%80%9D/156545/
5Moody’s announcement on July 23rd 2012, available at: www.moodys.com/research/Moodys-changes-the-outlook-to-negative-on-Germany-Netherlands-Luxembourg--PR_251214
6Speech by Mario Draghi, president of the European Central Bank, at the Global Investment Conference in London, July 26th 2012, available at: www.ecb.europa.eu/press/key/date/2012/html/sp120726.en.html
7“Money Creation and Responsibility”, speech by Jens Weidmann, September 18th 2012, available at: www.bundesbank.de/Redaktion/EN/Reden/2012/2012_09_20_weidmann_money_creaktion_and_responsibility.html
8“Banking union must be built on firm foundations”, Wolfgang Schäuble, Financial Times, May 12th 2013, available at: www.ft.com/cms/s/0/8bdaf6e8-b89f-11e2-869f-00144feabdc0.html#axzz2uvQwaeg2
7 The changing balance of power
1The best account of the Delors period is Delors: Inside the House that Jacques Built by Charles Grant (Nicholas Brealey, 1994).
2One of the first proponents of getting parliamentary groups to nominate their candidates for the presidency of the Commission was Simon Hix in What’s Wrong with Europe and How to Fix It (Polity, 2008)
3See article on extremist parties in Europe published in The Economist, January 4th 2014, available at: www.economist.com/news/briefing/21592666-parties-nationalist-right-are-changing-terms-european-political-debate-does
4This is discussed in Can Germany be Saved? by Hans-Werner Sinn, available at: www.cesifo-group.de/ifoHome/publications/individual-publications/Germany/Can-Germany-Be-Saved.html
5See “Europe’s new pecking order”, available at: www.economist.com/node/13610767
6A point made in “France: a Country in Denial”, available at: www.economist.com/node/21551478
7Heisbourg, F., La Fin du Rêve Européen, Stock, 2013.
8Reported at: www.spiegel.de/international/europe/now-europe-is-speaking-german-merkel-ally-demands-that-britain-contribute-to-eu-success-a-798009.html
9A comment on this speech is available at: www.zukunftsdebatte.eu/home/aktuell/news//ecfr-why-poland-is-the-new-france-for-germany/
8 In, out, shake it all about
1Tindemans, L., A Report on European Union, available at: bookshop.europa.eu/en/european-union-pbCBNF76001/
2The Schäuble-Lamers paper is available (in German) at: www.cducsu.de/upload/schaeublelamers94.pdf
3A more recent advocate of a two-speed Europe, basing some of his arguments on the euro, is a former Council legal adviser, Jean-Claude Piris, in his book The Future of Europe (Cambridge University Press, 2012).
4See “Can Angela Merkel hold Europe together”, March 10th 2011, available at: www.economist.com/node/18332786/
5Quoted at: www.economist.com/node/3194456/
6David Cameron’s speech at Bloomberg is available at: www.gov.uk/government/speeches/eu-speech-at-bloomberg
7George Osborne’s speech to Open Europe/Fresh Start conference, January 15th 2014, available at: www.gov.uk/government/speeches/extracts-from-the-chancellors-speech-on-europe
9 Democracy and its discontents
1This section draws on the analysis in two books with identical titles: Democracy in Europe. One is by Larry Siedentop (Allen Lane, 2000), the other by Vivien Schmidt (Oxford University Press, 2006).
2See Pew Global Attitudes Survey, May 2013, available at: www.pewglobal.org/2013/05/13/the-new-sick-man-of-europe-the-european-union/; and Eurobarometer, at: ec.europa.eu/public_opinion/archives/eb/eb79/eb79_publ_fr.pdf
3Guerot, U. and Klau, T., After Merkozy: how France and Germany can make Europe Work, available at: ecfr.eu/page/-/ECFR56_FRANCE_GERMANY_BRIEF_AW.pdf
4See, for example: www.globalpost.com/dispatch/news/regions/europe/130625/european-union-eastern-central-europe-accession
5Reports on this include: www.telegraph.co.uk/finance/financialcrisis/10088005/François-Hollande-tells-European-Commission-it-cant-dictate-to-France.html
6See reports on Gerrit Zalm, for example at: www.europeanvoice.com/article/imported/colourful-money-man/50233.aspx
7German constitutional court decision, June 30th 2009, available at: www.bverfg.de/entscheidungen/es20090630_2bve000208.html
8See CER paper by Heather Grabbe and Stefan Lehne, available at: www.cer.org.uk/publications/archive/essay/2013/2014-european-elections-why-partisan-commission-president-would-be-b; and also a note by Charles Grant, available at: www.cer.org.uk/in-the-press/how-reduce-eus-democratic-deficit
9In his inaugural lecture at the London School of Economics, Robert Cooper advocated electing the European Commission. See: www.lse.ac.uk/newsAndMedia/videoAndAudio/channels/publicLecturesAndEvents/player.aspx?id=1585
10 How the euro spoilt any other business
1The Commission proposals can be found at: ec.europa.eu/energy/doc/2030/com_2014_15_en.pdf
2The eventual text of the Bolkestein directive is available at: eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32006L0123:EN:HTML
3The Monti report can be found at: ec.europa.eu/bepa/pdf/monti_report_final_10_05_2010_en.pdf
4Quoted in the Charlemagne column, October 20th 2012, see: www.economist.com/news/europe/21564851-euro-was-meant-underpin-single-market-it-may-end-up-undermining-it
5See Pascouau, Y., The Future of the Area of Freedom, Security And Justice, European Policy Centre, Brussels, January 2014, available at: www.epc.eu/pub_details.php?cat_id=1&pub_id=4092
11 Europe’s place in the world
1See www.nytimes.com/1991/06/29/world/conflict-in-yugoslavia-europeans-send-high-level-team.html
2This point is also made in The Uncertain Legacy of Crisis: European Foreign Policy Faces the Future by Richard Youngs (Carnegie Endowment for International Peace, 2014).
3See “Defenceless?”, Charlemagne column, December 21st 2013, available at: www.economist.com/news/europe/21591880-austerity-hollowing-out-europes-armies-defenceless
4This led to an especially acerbic speech by the American defence secretary, Robert Gates, available at: www.defense.gov/speeches/speech.aspx?speechid=1581
5For one example of measures on Bulgarian and Romanian immigration, see: www.ukba.homeoffice.gov.uk/eucitizens/bulgaria-romania/
6The latest European Commission report on enlargement to Turkey is available at: ec.europa.eu/enlargement/pdf/key_documents/2013/package/tr_rapport_2013.pdf
7Information on the European Union’s eastern neighbourhood policy can be found at: www.eeas.europa.eu/enp/index_en.htm
12 After the storm
1Schäuble, W., “Ignore the Doomsayers. Europe is being fixed”, Financial Times, September 16th 2013, available at: www.ft.com/cms/s/0/e88c842a-1c67-11e3-a8a3-00144feab7de.html#axzz2nqL7SnRz
2Greece: Ex Post Evaluation of Exceptional Access under the 2010 Stand-By Arrangement, IMF, June 2013, available at: www.imf.org/external/pubs/ft/scr/2013/cr13156.pdf
3Fiscal Federalism: US History for Architects of Europe’s Fiscal Union”, by C. Randall Henning and Martin Kessler, Bruegel, January 2012, available at: www.bruegel.org/publications/publication-detail/publication/669-fiscal-federalism-us-history-for-architects-of-europes-fiscal-union/
4A good summary of the federal and “mutual assurance” models is provided by Jean Pisani-Ferry in a paper (in French) for Bruegel, Assurance Mutuelle ou Fédéralisme? la Zone Euro entre Deux Modèles, available at: www.bruegel.org/download/parent/757-assurance-mutuelle-ou-federalisme-la-zone-euro-entre-deux-modeles/file/1623-assurance-mutuelle-ou-federalisme-la-zone-euro-entre-deux-modeles/. Some of his views are set out in English in shorter form in an op-ed for Project Syndicate, available at: www.project-syndicate.org/commentary/federalism-or-bust-for-europe-by-jean-pisani-ferry
5Mody, A., A Schuman Compact for the Euro Area, Bruegel, November 29th 2013, available at: www.bruegel.org/publications/publication-detail/publication/802-a-schuman-compact-for-the-euro-area/
6Glienicker Group, “Towards a Euro Union”, op-ed in Die Zeit, October 17th 2013, available in English via Bruegel at: www.bruegel.org/nc/blog/detail/article/1173-towards-a-euro-union/
7Pour une Communauté politique de l’euro, Groupe Eiffel Europe, February 2014. English version available at: www.bruegel.org/nc/blog/detail/article/1250-for-a-euro-community/
8Allart, C. et al., Towards a Fiscal Union for the Euro Area, IMF, September 25th 2013. Paper and technical notes available at: www.imf.org/external/pubs/cat/longres.aspx?sk=40784
9The European Commission looked at various options for “stability bonds” in November 2011 (ec.europa.eu/commission_2010-2014/president/news/documents/pdf/green_en.pdf). In the “Blue Bond” proposal for Bruegel, Jakob von Weizsäcker and Jacques Delpla proposed mutualising all “good” debt up to the Maastricht threshold of 60% of GDP (www.bruegel.org/publications/publication-detail/publication/403-the-blue-bond-proposal/). The German Council of Economic Experts proposed instead pooling “bad” debt above this level in a fund to be paid off over 20 years (www.sachverstaendigenrat-wirtschaft.de/aktuellesjahrsgutachten0.html).
10Both these ideas are proposed in How to Build a Modern European Union by Charles Grant and others (Centre for European Reform, 2013).
11Clark, C., The Sleepwalkers: How Europe Went to War in 1914, Allen Lane, 2012.
12Simms, B., The Struggle for Supremacy: Europe from 1453 to the Present, Allen Lane, 2013.