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“A reform of the euro might be an unpopular move in the world of politics right now, but it is vital. The ECB’s actions saved the euro, but now it is up to the governments to do their job,“ says Enrico Letta, one of the coordinators of the group. Henrik Enderlein adds: “The euro is vulnerable and urgently needs to be reformed, otherwise it won't survive the next crisis. We don't know whether the next crisis will hit in six weeks, six months or six years. But we need to take action now.“
The recommendations are based on the conviction that only an overhaul of the euro and the existing crisis mechanisms can guarantee the long-term survival of the EU. The report puts forward a three-step plan to reform Economic and Monetary Union:
1. A first-aid kit for the Monetary Union that addresses shortcomings in crisis management and economic coordination.
2. Growth in the EU has to be strengthened by a combination of investments and reforms.
3. In the medium term, the euro has to be based on a large degree of risk sharing and sovereignty sharing. This goes hand in hand with developing the permanent European rescue mechanism, the ESM, into a European Monetary Fund under greater parliamentary control.
Even though the EU currently faces challenges in many areas, including Brexit and the refugee crisis, the authors of the report underline the urgency of the euro reforms. The Chairman of the Bertelsmann Stiftung and co-author of the report, Aart De Geus, clarifies: “We cannot shy away from changes. We must reform the eurozone today if we want the next generation to live in a unified and strong Europe tomorrow.“
The report was prepared in cooperation between the Bertelsmann Stiftung, the Jacques Delors Institut – Berlin and the Jacques Delors Institute in Paris, and supported by the research project “Repair and prepare: strengthen the euro“ of the Bertelsmann Stiftung and the Jacques Delors Institut – Berlin. [...]