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The report suggests advancing towards a more complete EMU in two stages: first, “deepening by doing” and enforcing non-legally binding standards, second, “completing EMU” by shifting towards binding standards and a “shock-absorption capacity”. 2025 is the new time horizon for the end of the transformation process, including a euro area treasury.
Comments on the report have so far stressed how much EU leaders have scaled down their ambitions compared to what they had in mind two or three years ago. At that time, debt mutualisation and transnational fiscal transfers were said to be a matter of years, and a precondition for the euro’s survival. In November 2012, José Manuel Barroso, then president of the European commission, suggested a five-year, three-step process to achieve a “deep and genuine” EMU including common insurance on short-term government debt (eurobills, an incipient for eurobonds) and a euro area budget capacity. A month later, Herman Van Rompuy, the former president of the European council, tabled a roadmap “towards a genuine economic and monetary union”. The third and final stage was meant to create a shock-absorption capacity and “common decision-making on national budgets” after 2014.
It is tempting to decry the leaders’ lack of ambition today, and to conclude that the eurozone will continue muddling through and is condemned to secular stagnation. A form of delusion has overtaken most commentators who saw the crisis as the momentum for further integration and the set-up of more centralised, federal institutions. Yet this is only one side of the story. Between the lines, the new roadmap includes at least three interesting developments: the commitment to continue with the ‘hard politics’ of coordination, the preference for common standards over one-size-fits-all reform prescriptions, and a suggested move towards ‘collective’ rather than ‘single’ or ‘common’ decision-making.