Guntram Wolff (Bruegel) presented five priority areas for the European Union during his keynote speech at the wiiw Spring Seminar. Watch his full presentation here.
As Director of the economic think tank Bruegel based in Brussels, Guntram Wolff is one of the most eminent experts on the macroeconomics and reform of the euro area. At this year’s wiiw Spring Seminar he described five priority policy areas for the post-Brexit European Union.
Wolff’s five priority areas for the EU:
1. Tackle existing problems: Meeting the challenge of low productivity growth needs true national ownership, and the Single Supervisory Mechanism (SSM) of the European Central Bank and national supervisory authorities need to regain credibility.
2. External agenda: The United States is one of the EU’s main trading and investment partners. However, in light of the potential for a more protectionist US trade agenda, the EU should aim at building a partnership with China; all the more so in the context of pressing global issues such as climate change. The external agenda should also cover the stepping up of military cooperation between EU countries, working with countries in North Africa to deal with the challenges of migration, and improved policies to integrate migrants.
3. Divergence agenda: The necessity to reduce current account and price divergences in the euro area concerns primarily it biggest economies – Germany, France and Italy. Mr Wolff argued that each country has a responsibility to overcome the current divergent path, and that the burden of adjustment should not only fall on the deficit countries.
4. Euro area architecture: Finding a solution for how to deal with unsustainable debt levels is overdue. Typically ‘federal systems’ have a clear and credible no-bail-out clause and financial as well as banking policies assigned to the federal level.
5. Multispeed Europe and its neighbours: A ‘multispeed’ Europe does not only refer to different speeds of economic development. Recent events in Poland or Hungary also point to diverging trends in the political, cultural and social spheres. However, now more than ever EU members should be united in their position on how to deal with the UK after Brexit, or with Turkey.