Assessing EU Monetary Policies
in a Post-Covid Political Economy
With crises around us and a persistent expansive monetary policy, we are witnessing daily increases in prices while our purchasing power is rapidly fading, hurting low and middle-income earners and families in particular. The explosive potential of inflation rates at the beginning of 2022 and the slow realisation of the potential societal fallout is pushing institutions to rethink the principles of monetary union and speed up its completion. The existing endemic crisis in growth rates and inflation in the Euro Area monetary and banking system has created new dynamics affecting the financial and banking system across Europe.
This issue of the Future Europe Journal attempts to add content to the long-standing discussion about the necessary changes in the organisation of the monetary and banking union. Questions about the independence of the ECB during the pandemic vis-à-vis monetary strategy and a comparative analysis of bailout policies may give rise to suggestions for new rules to secure fiscal sustainability in the European Monetary Union. All these topics are brought together by our guest editor, Juan Castañeda, in order to focus the discussion that liberals and democrats have to engage in.
The problem of inflation is far from over and we are moving head-on into the next crisis, exacerbated by the Russian invasion of Ukraine. But, ironically, this may in fact provide a way out of the uncertainty characterising EU monetary and financial integration: the experience of the adverse shock after the war in Ukraine might force the monetary institutions to provide the system with resilient and responsive features, at least in the short term.