Reconciling risk sharing with market discipline

IIEA20th April 20182min
Prof. Bénassy-Quéré discussed recent attempts by leading academics from France and Germany to overcome the differing approaches towards EMU reform in both countries.

At the political level there are deep divisions between Eurozone countries which prioritise risk sharing and those which prioritise market discipline. Ireland is one of a group of like-minded member states including the Netherlands, and the Baltic and Nordic states, known as the Hanseatic League, which prioritise market discipline and consequently have urged restraint on the “communitisation” of EMU functions. However in the academic sphere serious attempts have been made by academics to bridge this divide. The most significant development in this regard is the paper entitled: ‘Reconciling risk sharing with market discipline: A constructive approach to Euro area reform’, to which Prof. Bénassy-Quéré contributed. In her address to the IIEA, Prof. Bénassy-Quéré argued that the political stalemate between ‘risk reduction’ and ‘risk sharing’ is a false dichotomy and that solutions are available to resolve the main problems faced by the Eurozone.

 

About the speaker

Agnès Bénassy-Quéré is a Professor at the Paris School of Economics – University of Paris, Panthéon-Sorbonne. She is also a Member of the French macro-prudential authority, of the board of the Banque de France, a fellow the Institute for the Study of Labour (IZA) and a member of CESIfo. From 2012 until 2017, she chaired the French Council of Economic Advisors. Prior positions include Director of CEPII, the main French research institute in international economics (2006-2012), and academic positions at École Polytechnique, the University of Paris-Ouest and the University of Lille. Her research interests focus on the international monetary system and European macroeconomic policy.