Going 'Belt and Braces': Domestic Effects of Euro-Crisis Law
This paper considers the effect of the recent EU measures relating to strengthened economic governance both at the EU level and the level of national (constitutional) law. We first explain the scope of EU competence in economic policy and its effects on Member State competence. We will then examine how this competence has been exercised during the past few years, in particular from the point of view of the domestic effects of the six-pack and two-pack, which constitute the ‘Belt’ needed to maintain stability in the euro area and thus hold the ‘trousers’ (economic policy decision-making) up. We then turn to the Fiscal Compact and the budgetary framework directive and their effects at national level, constituting the ‘Braces’ intended to ensure healthy national budgetary policies. The relevant question remains to be whether the current 'belt and braces' rules are the appropriate approach for preventing new crises. There are both legal and political reasons for reconsidering some of the solutions made during the crisis. Maybe the trousers are just too loose?
The Stability, Coordination and Governance Treaty: Principle, Politics and Pragmatism
The EU financial crisis has generated a range of economic, political and legal responses. This article focuses on one such response, the Treaty on Stability, Coordination and Governance (the TSCG), which was signed by 25 contracting states in March 2012. The discussion begins with the political background to the TSCG, which is essential in order to understand its legal form and content. This is followed by an outline of its principal provisions. There is then more detailed discussion of the core elements of the TSCG, the “balanced budget” rule and the correction mechanism, in order to determine what they add to the existing rules and assess their efficacy.The focus then shifts to broader issues of principle. The TSCG is of interest not merely for those concerned with economic and monetary union. It raises more fundamental issues of principle concerning the legitimacy of states, together with EU institutions, proceeding outside the confines of the Lisbon Treaty to attain goals that cannot be achieved through normal methods of Treaty amendment. It generates important inquiries concerning the extent to which a Treaty outside the confines of the Lisbon Treaty can confer new powers on EU institutions, and whether existing powers of EU institutions can be used in such a context. It entails significant issues concerning the way in which we interpret provisions of the Lisbon Treaty concerning the European Court of Justice (ECJ) that are directly relevant to the schema of the TSCG. The article concludes by reflecting on some broader legal and political ramifications of the TSCG.
Complexity, Network-Decisions And Alternative Risk Premia: Some New Theories Of Structural Change And Portfolio Decisions.
Structural Change is the basis for many decisions such as government fiscal and monetary policies, government interventions, corporate-expenditure decisions, corporate strategic decisions, portfolio management decisions in finance; household allocation decisions, etc.. Structural change in industries and national economies is increasingly more difficult to detect partly because of the growth and dominance of Complex Systems and “Networks” in modern industries and economies – such Networks and Complex Systems include GVCs (global value chains), retail store networks; franchising networks; internet networks; services networks; credit-chains in industries; online social networks; etc.. The relationship between Complexity and Structural Change is well established in the physics, applied math and economic dynamics literatures. Traditional definitions and modeling of structural change have erroneously focused on changes in labor, technological progress, market share, and or capital – which are grossly inadequate in the new economy and post- global financial crisis (as confirmed by changes in the global retailing and housing industries and other industries). Also the modeling of structural change seems to be constrained by the availability of data, and often omits the relationship between structural change on one hand, and globalization, financial stability and international financial contagion. This article: i) introduces the Operations Strategy Model of structural change, explains how it differs from the Lewis Model of Structural Change; and explains the often omitted relationship between operations strategy (of companies and government agencies) and structural change; ii) introduces other new Complexity-based models/theories of Structural Change in industries; iii) reviews the relationships among Operations Research, Complexity and Structural Change; iv) explains the symbiotic relationship between structural change on one hand, and economic growth, financial stability, financial contagion and globalization; v) discusses the significant gap between academic research and practice and explains some issues and factors that should be considered in the development and testing of structural change models; vi) explains how alternative risk premia can be generated from new models of Structural Change.