Development Economist Karl Wohlmuth from the University of Bremen has contributed two versions of a paper on “J. M. Keynes, Market Transparency and the Regulation of International Commodity Markets” to the Journal of European Economy, published by the Ternopil National Economic University (TNEU) in the Ukraine (see the link: http://www.tneu.edu.ua/en/). The TNEU is a cooperation partner for our Central and Eastern Europe activities.
First Essay (English Version), Journal of European Economy, Volume 17, Number 4, October - December 2018: BACK TO J. M. KEYNES IN REGULATING INTERNATIONAL COMMODITY MARKETS: AN EXTENDED NOTE ON THE "TRANSPARENCY AGENDA" (Access Links: http://jee.tneu.edu.ua/en/archive-en/2018-en/vol-17-no-4-december-2018-en/ and: http://jee.tneu.edu.ua/en/archive-en/2018-en/1133-journal-of-european-economy-vol-17-number-4-december-2018-pp.html (PDF: English Essay - Wohlmuth-Ternopil-pages 351-397)
Second Essay (Ukrainian Version), Journal of European Economy, Volume 17, Number 4, October - December 2018: МІЖНАРОДНІ ТОВАРНІ РИНКИ: ЛІБЕРАЛІЗМ ПРОТИ ДИРИЖИЗМУ (АКТУАЛІЗАЦІЯ ПОГЛЯДІВ ДЖ. М. КЕЙНСА)/ Internationale Warenmärkte: Liberalismus gegen Dirigismus (Aktualisierung der Äußerungen von J. M. Keynes) (Access Links: http://jee.tneu.edu.ua/en/archive-en/2018-en/vol-17-no-4-december-2018-en/ and: http://jee.tneu.edu.ua/en/archive-en/2018-en/1133-journal-of-european-economy-vol-17-number-4-december-2018-pp.html (PDF: Essay in Ukrainian Language - Wohlmuth-Ternopil-Ukrainische Version-4-20119)
Abstract: In this paper weak and strong forms of global governance of raw materials markets are compared. This is done by comparing the «transparency agenda» with the «structural reform agenda». John Maynard Keynes has worked for decades academically on commodity markets, on speculation and storage, on forward markets and buffer stocks etc., but he has also practiced commercial trading activity on various commodity markets; and he has written and/or influenced the Post-World War Two ICU/ITO (International Clearing Union/International Trade Organization) agendas which are containing detailed provisions for establishing
a world order on commodity markets. He was very much interested in the relation between price volatility of raw materials and its impacts on global macroeconomics, but he was also convinced that appropriate regulations of commodity markets and sectors impact positively on peace and development. He was convinced that strong global governance must be based on simple, stable, effective,
consensual and binding rules. Now the «transparency agenda» with regard of raw materials is so much debated but it is a rather weak form of global governance, while the «structural reform agenda» represents a rather strong form of global governance of the resources sectors. The «transparency agenda» is discussed in great detail in this paper while the «structural reform agenda» is considered in the Conclusions and Outlook section but needs further elaboration in a follow-up paper.
Key issues of this debate are increasingly relevant now as new supply and demand factors impact on the global commodity markets, on prices and quantities; and, strategic, technological, protectionist and military considerations affect more and more the global commodity markets. The markets are on the way of becoming less transparent despite of so many international organizations watching the commodity markets and caring for data and oversight. In the IWIM publications there are many studies dealing with the structure and the functioning of the commodity markets (see the links to Publications of IWIM: http://www.iwim.uni-bremen.de/publikationen/index.html and: https://www.karl-wohlmuth.de/publikationen/).
Professor Chunji Yun, Professor since 2010 at the Division of International Economics, Department of Economics, Seinan Gakuin University, Fukuoka City, Japan is since September 2017 Guest Researcher at the Faculty of Economics and Business Studies, University of Bremen; he will stay until August 2018. He was invited by Professor Karl Wohlmuth and the Dean, Professor Jochen Zimmermann, to do researches on the theme Transforming the European Social and Economic Model in the Enlarged EU from a Viewpoint of the Production and Employment Regime (see the synopsis of the research outline below under Research Purpose,..). This is the second research visit by Professor Yun in Bremen. Ten years ago Professor Yun was research fellow at IWIM for 18 months. He has published in the IWIM book series as number 13 (Link: http://www.iwim.uni-bremen.de/publikationen/pub-jwt.htm) on “Japan and East Asian Integration” and in the White Discussion Paper series as number 33 (Link: http://www.iwim.uni-bremen.de/publikationen/pub-white.htm) on “Production Network Development in Central/Eastern Europe and Its Consequences”. Based on these publications, Professor Yun was invited to international conferences and he was asked to submit papers for international publications. The contact between IWIM, University of Bremen and Professor Yun continued over the years.
Research Purpose, Analytical Standpoints, Previous Studies and Expected Research Results (a short summary of the Research Proposal):
With the deepening of the economic integration, and particularly since the recent Euro Crisis, there are heated debates over the social dimension of integration in Europe. The background of the discussion is if the European Union (EU) aims at an ‘Economic Europe’ or moves towards a reconstruction of a ‘Social Europe’. In this context, the research aims to analyse the transformative dynamics of economic and social models in the enlarged EU, by exploring how nationally organized employment regimes are forced to adapt to the deepening of an ‘Economic Europe’. More specifically, the national employment regimes are affected by changing cross-border production regimes which are characterized by processes of “fragmentation of production”, “global/regional production networks”, and “global value chains (GVC)”. Also, an investigation of the possibilities of reversing the ‘Race-to-the Bottom’ situation of social conditions within the EU is intended as part of the study.
The research will be carried out as mainly being based on two influential analytical perspectives, the “variety of capitalism” approach and the “global value chain” approach. The former approach has analysed various European economic and social models, focusing on the institutional complementarity among industrial relations, including collective bargaining, labour market flexibility or rigidity, the vocational training system, the financial system, and so on. This approach is also giving special attention to the interrelationships among the required skill specificity, the skill formation, employment and social protection systems, and the institutional comparative advantages of each national employment model. On the other hand, the latter approach, as a most influential analytical perspective on global manufacturing and service industries, has elaborated analyses of a cross-border division of labour featured as vertical specialization or vertical integration/disintegration. This latter approach is using a sophisticated methodology and is developing policy arguments for industrial upgrading within the hierarchical structure of the new international division of labour. And, most recently, its focal point is shifting from industrial upgrading to social upgrading/downgrading. The most important feature of the research is to figure out the interactions and/or the causal relations between GVC development within and beyond the enlarged EU and the transformation of economic and social models.
Research Outcomes by February 2018: First Research Report is available, Second Research Report is forthcoming
Professor Yun has presented a first report on his researches in December 2017. The second research report is forthcoming in February 2018.
In the first research report from December 2017 Professor Yun discusses four themes:
1. Starting Point or Background of Research (first draft)
There is a discussion about two prevailing myths. The Myth 1 is related to the Eurozone Crisis considered as being due to fiscal profligacy and being a sovereign debt crisis right from the start. The Myth 2 refers to the Eurozone Crisis as a crisis of (Unit Labour) cost competitiveness in combination with fiscal irresponsibility. These two arguments are evaluated.
2. Problematic Causal Chain of (Cost) Competitiveness, Imbalances, and Internal Devaluation (first draft)
There is a discussion of the role of the Unit Labour Cost (ULC), being considered as an a priori argument for labour market reform being inherent in the referred to competitiveness indicators. The drawbacks of the ULC analysis are presented. This is followed by a survey of recent researches on the regional imbalances in the EU.
3. The Germany-centred production network and the regional imbalances in the European Union (still work in progress)
There is a discussion on the contradictory neoclassical views on the German export surplus, then a discussion on the German position within the regional production networks (manifested by the GVCs), and finally a discussion on the changes occurring and the differences becoming visible in regard of Global Value Chain-GVC/ Global Production Network-GPN Structures.
4. Transforming the Employment Regime in terms of GVC/GPN: Germany and Visegrad (still work in progress)
The analysis starts with a discussion on social upgrading/downgrading in GVC-based development patterns, followed by an analysis of the erosion of the German Model interpreted as a Diversified Quality Production (DQP) model. Then the changes of this model are analysed, by looking at two kinds of modularization and the implications for the production networks, referring to the electronics and automotive sectors. Then for these two sectors the implications of the expanding production networks on the employment regimes are considered.
Professor Yun is doing intensively literature researches, but is also attending conferences, lectures and discussions with experts in the field. He is also considering to visit international enterprises which are located in Bremen, as these enterprises are valuable sources for information on global value chains (GVCs) and global production networks (GPNs) between Germany and the Visegrad countries. Professor Karl Wohlmuth is meeting regularly with Professor Yun for discussions of the issues. The study has high relevance also for the strategy of the German trade unions as globalization impacts differently on economic sectors in Germany.
The programme of the Conference of the Institute for New Economic Thinking (INET) in Edinburgh, 21-23 October, had the overall theme: “Reawakening. From the Origins of Economic Ideas to the Challenges of Our Time”. The Conference was a remarkable event. There were panels, main lectures and presentations, keynote lectures, breakfast, lunch and dinner sessions, on subjects such as the consequences of the financial crisis and the great recession afterwards; the future of the eurozone; the growth of the dual economy in the advanced economies; the causes of popular revolts and of the rise of populism; lessons from democratic collapses and the rise of Nazi Germany; the rise of Trump and the America First Agenda; the emergence of public and private debt traps; the role of fake news and the role of economists; new developments in various contested fields of economics and political economy; but also discussions on developing economies and emerging economies; on Adam Smith and the Scottish Enlightenment; on technology and economic development; on immigration and intergenerational issues; on gains from trade, and so on. Lectures and presentations by four Nobel Prize Economists were of special importance and insights. George Akerlof, James Heckman, Michael Spence and Joseph Stiglitz gave impressive presentations on methodology used by economists, on specific contested issues of the economics profession, and on the policy implications of the work of the economists in governments and international organizations (see the link to the event: https://www.ineteconomics.org/events/reawakening). See on the overall agenda of INET: https://www.ineteconomics.org/
For development economists the sessions about the growth of the dual economy in the advanced world were a highlight. The discussion about dual economies was for a long time a domain of development economics; the development economists studied the take-off and the catching-up issues. The original purpose of dual economy models was it to show how a modern sector can be developed through surplus labour from a stagnating traditional sector. Now top economists were discussing at the conference in Edinburgh the growth of the dual economy in advanced countries to understand the “high income trap” which is affecting the most advanced economies. At high average per capita income levels severe problems arise for growth, employment and distribution which create political tensions and social problems in many advanced countries (see on the need to analyse the “high income trap” of the OECD countries as deeply as the “middle income trap” of the developing countries the following viewpoint: https://asia.nikkei.com/Viewpoints-archive/Economeister/Time-to-talk-about-the-high-income-trap?page=2). A new class formation is presented which is resulting from the “high income trap”: the “precariat” is increasing, the “rentier class” is growing, but the “middle class” is vanishing. In two sessions of the Edinburgh Conference the reasons for the emergence of the dual economy in the advanced countries and the type of policies to prevent the further advance of the dual economy were discussed. The new class formation is associated with a growing income share of the upper 1% of the income earners, while an increasing part of the capital share is going to the rentier class and an increasing part of the labour share is going to higher level wage earners.
The middle class is described as increasingly vulnerable and vanishing, while the class of precarious income earners is rapidly growing. Figures presented by Lance Taylor at the Edinburgh Conference highlight the new class structure for the USA. The USA have a three-class economy, so that it is better to speak of a “trialism”, not of a “dualism” in the USA (and probably the same situation is in other advanced economies). Lance Taylor writes: “The main income sources of the top 1% of households are from capital gains, proprietors’ incomes, interest, and dividends. Including capital gains they have a 50+ % saving rate, and 40% of total wealth. Households between the 60th and 99th percentiles get 70% of their income from wages, ~10% each from fiscal transfers, finance, and proprietors’ incomes. They save less than 10%, and hold 60% of wealth (mostly housing). The bottom 60% get almost 50% of income from wages, and 45% from government transfers. They have negative reported saving (true for other OECD economies), and a negligible wealth.” The interactions of these three classes (assuming that these trends continue) are important for the overall dynamics or stagnation of the economy. The interactions determine also the crises to be anticipated. Therefore, the Edinburgh Conference discussed which type of policies could prevent the spread of dual or trial economies and the emergence of severe crises in the future (proposed interventions mentioned were: innovative enterprises to achieve sustained prosperity; wealth creation through state entrepreneurship; new policies for redistribution of wealth and income; a guaranteed minimum income plus a commitment of the society to full employment; gender-related policies to combat the dualism and trialism; etc.). Reforms to get out of the “high income trap” are possible, but the “policy paralysis” has to be overcome.
Professor Wohlmuth had the opportunity to participate as a guest observer at the conference in Edinburgh by invitation of INET. The participation at the conference opens new avenues for the work in development economics, but also in regard of international economic policy. The dual/trial economy approach as applied to advanced economies is also helpful to understand the rise of the populists all over the world, the danger of democratic collapses, and the decline of the Social Democratic Movement in Europe. Professor Karl Wohlmuth has written a Note on the reasons for the decline of the Social Democrats in Germany, which is based on the dualism/trialism concept and which is also relevant for an understanding of the decline of Social Democratic Parties in other countries of the Eurozone.
Zur Problematik der Ökonomie in der Ukraine; die Bremer Presse berichtet am 10. 3. 2015 über ein fragwürdiges Engagement in der Ukraine unter dem Titel: "Steinbrück und die Oligarchen": Link: http://www.weser-kurier.de/startseite_artikel,-Steinbrueck-und-die-Oligarchen-_arid,1075517.html
Die Forschungsstelle Osteuropa der Universität Bremen berichtet regelmäßig in ihren „Ukraine-Analysen“ über die aktuellen Ereignisse und Entwicklungen: Link: http://www.laender-analysen.de/ukraine/ . Die Ukraine-Analysen werden gemeinsam mit der DGO (Deutsche Gesellschaft für Osteuropakunde e. V.) herausgegeben.
Am 23. März 2015 fand am Fachbereich Wirtschaftswissenschaften der Universität Bremen eine Konferenz über die Wirtschaftsprobleme der Ukraine statt. Die Konferenz wurde vom Ko-Direktor des IWIM, Prof. Dr. Axel Sell, organisiert und vom Verein zur Förderung des Fachbereichs Wirtschaftswissenschaft der Universität Bremen wiwib e. V. finanziell unterstützt. Professor Sell führte in die Thematik der Konferenz ein und erläuterte das Programm (vgl. den Abschlussbericht von Professor Sell zur Konferenz). Professor Dr. Oleksandr Sushchenko, Vizepräsident der Kiev National Economic University (KNEU) und Professor Dr. Oleksandr Dyma, Vizedekan der Faculty of Human Resource Management and Marketing der Kiev National Economic University (KNEU), erläuterten in ihren Vorträgen die gegenwärtige Lage und die anstehenden Reformen. Dr. Stefan Barenberg, Doktorand am IWIM, ging auf die Reformen im Bereich Corporate Governance ein. Frau Professor Dr. Jutta Günther und Maria Kristalowa vom IINO erläuterten die besondere Situation der Ukraine in Bezug auf die Auslandsinvestitionen. Prof. Dr. Karl Wohlmuth ging auf die Prioritäten bei den Wirtschaftsreformen und auf ein Strategiekonzept für die Vollendung der Transformation in der Ukraine ein (vgl. die Kurzdarstellung und die PDF von Professor Wohlmuth zu den Reformprioritäten und den Strategieansätzen für die Ukraine). Frau Katerina Bosko von der Forschungsstelle Osteuropa der Universität Bremen leitete die Abschlussdiskussion.
Frau Katerina Bosko von der Forschungsstelle Osteuropa leitet die Abschlussdiskussion zur Ukraine-Konferenz
Die Kooperation mit der Kiev National Economic University (KNEU) wird von Professor Sell und vom Fachbereich Wirtschaftswissenschaft weiter vertieft werden. Die Ergebnisse der Konferenz zeigen, dass die Ukraine vor großen Herausforderungen steht und die notwendigen und weithin bekannten Reformen endlich umsetzen muss. Insbesondere in allen Bereichen der Governance sind Reformen notwendig, um die Strukturtransformation in der Ukraine erfolgreich voranzubringen und Kurs auf Europa zu nehmen. Das Abkommen Minsk II bietet nun wieder die Chance, in der Ukraine jene Weichenstellungen zu treffen, die eine Vollendung der Transformation und ein erfolgreiches Andocken an die europäische Wirtschaftsdynamik ermöglichen.
A Comprehensive Transformation Process has to start NOW in Ukraine – How to Speed Up Structural Transformation by Deep Societal and Economic Reforms?
Are the current problems in Ukraine due to ethnic and political tensions, or due to delays in political and economic reforms, or are the causes of the problems much deeper rooted? In a new study on the Axiological Foundations In The Management Of Socio-Economic Development Of Ukraine two researchers from Ukraine - Dr Vitaliy Krupin, Senior Researcher, Doctor of Economics, and Yuriy Zlydnyk, Ph.D. Candidate, both from the Institute of Regional Researches of the National Academy of Sciences of Ukraine, Lviv, Ukraine – present their views on the root causes of the problems and on steps towards inclusive, effective and comprehensive structural transformation processes in Ukraine.
After reviewing the socioeconomic characteristics and trends of the Ukraine, the authors highlight the problems of socio-economic development in the context of axiological principles, emphasizing spiritual values and ethical foundations in the Ukrainian society. Ethical norms and value systems have to be studied in order to understand the root problems in the Ukraine of our days. Such problems, as manifested by large-scale corruption, chaotic development processes, unorganized state actions and other failures and deviations in society, can only be overcome – according to the authors - by reforms based on axiological principles. Individual conduct and responsibility of the individual for his/her actions have therefore to be investigated in the context of the ongoing transformation and reform processes in Ukraine.
The axiological foundations for managing socio-economic development processes in the Ukraine were so far not considered as important topics in the researches on the transformation process in Ukraine. The two authors emphasize this aspect as crucial for effective further steps towards inclusive transformation processes. Analyzing the socio-economic indicators since the independence of Ukraine and the results of various corruption indices and barometers for Ukraine the extent of the societal and economic problems becomes obvious. The example of small business activity in Ukraine is presented as a case in point. The authors write that declaratively, small businesses are under minimal state control, but in reality, there are almost 40 different state authorities with rights to check and to suspend any activity of a business, inviting corrupt practices and so leading to widespread informal activities. But, as spiritual values of the people are at the root of these socio economic development problems, all reform policies to initiate a business-friendly environment and to fight corruption and other failures in the development process have to be guided by measures to overcome the lack of formed spiritual values. Informational measures and educational programs are recommended along with deep societal and economic reforms.
Professor Karl Wohlmuth has advised and supported the Research Group from the National Academy of Sciences of Ukraine in Lviv during the final phase of researches. The cooperation between Bremen and Lviv will be continued. The paper will be published in Issue 2, 2014 of “Berichte”, the journal of IWIM’s partner institute in Berlin (Forschungsinstitut der IWVWW e. V.).
Im Jahr 2014 werden die Perspektiven der Welternährung und der Ernährungssicherheit in Afrika im Mittelpunkt der globalen entwicklungspolitischen Diskussionen stehen. Das UN Year of Family Farming (Link: http://www.fao.org/family-farming-2014/en/) und das AU Year of Food Security (Link: http://nigeria.gounna.com/show/show/42195/1) führen zu internationalen Verhandlungen und Diskussionen, die insbesondere auch die EU herausfordern werden. Die EU ist daher gefordert, im Dialog mit Afrika neue Akzente zu setzen. Alle Aspekte der Welternährung und der Ernährungssicherheit in Afrika werden daher bei den anstehenden EU-AU-Verhandlungen auf dem Prüfstand stehen; von afrikanischer Seite wird erwartet, dass die EU im Rahmen der Entwicklungszusammenarbeit und auch bei den Agrar-, Handels-, Umwelt- und Klimapolitiken mit neuen Vorschlägen antritt. 2014 ist das Jahr des vierten EU-AU-Gipfeltreffens im April in Brüssel, das erste Jahr des Mehrjährigen Finanzrahmens der EU, und für die AU ist 2014 der Beginn der dritten Strategischen Planperiode bzw. auch das Jahr der "Landwirtschaft und Ernährungssicherheit" (vgl. dazu einerseits das EU/ECDPM (European Centre for Development Policy Management) Challenges for Africa-EU Relations in 2014 Paper: http://www.ecdpm.org/Web_ECDPM/Web/Content/Download.nsf/0/72EA20FE64B9A92EC1257C4600386506/$FILE/FINAL%2013-PMI05-challenges%20english%20%281%29.pdf und andererseits die Beschlusslage der AU zum Strategischen Plan der AU für 2014-2017: http://summits.au.int/en/21stsummit/events/african-union-commission's-strategic-plan-2014-2017-adopted-assembly ). Das Jahr 2014 kann daher zu einer Wende in den EU-AU-Beziehungen führen, was angesichts der globalen Konkurrenz um Einfluss in Afrika als vielleicht letzte Chance für Europa gesehen wird (vgl. dazu auch F. Rampa, ECDPM: http://www.ecdpm-talkingpoints.org/challenges-2014-family-farming-african-food-security-and-eu-au-relations-deadlock-or-turning-point-in-2014/).
Professor Karl Wohlmuth geht in seinem neuen Essay "Perspektiven der Welternährung. Plädoyer für eine neue Afrikapolitik der Europäischen Union" auf die Möglichkeiten ein, die "Gemeinsame Strategie Afrika-EU" so umzubauen, dass die Ernährungssicherheit in Afrika im Zentrum der zukünftigen gemeinsamen Arbeit steht. Die 2007 in Lissabon vereinbarte Gemeinsame Strategie Afrika-EU hat bisher in keiner Weise die Erwartungen erfüllt und das Jahr 2014 bietet nun die Chance, neue Akzente zu setzen. Der Bremer Wirtschaftsprofessor zeigt vier Handlungsebenen auf, wie die Probleme der Ernährungssicherheit in Afrika im Rahmen der Gemeinsamen Strategie Afrika-EU konstruktiv aufgegriffen werden können. Konkrete Projekte, Programme und Aktionen werden aufgeführt. Der Beitrag wurde für die letzte Europakonferenz des Forschungsinstituts der IWVWW e. V. an der Humboldt-Universität zu Berlin im November 2013 erarbeitet. Die Studie wird in der Zeitschrift "Berichte" und auch in der "Blauen Reihe" des IWIM erscheinen (vgl. Publikationen Karl Wohlmuth). Das Institut in Berlin ist seit vielen Jahren Partnerinstitut des IWIM.
In this essay Back To John Maynard Keynes in Regulating International Commodity Markets Professor Karl Wohlmuth compares weak and strong forms of global governance of international raw materials markets. This is done by comparing the "transparency agenda" with the "structural reform agenda". John Maynard Keynes has worked for decades academically on commodity markets, on speculation and storage, on forward markets and buffer stocks, etc., but he has also gained practical experience on these markets by intensive commercial trading activity on various commodity markets. Based on this immense knowledge he has influenced fundamentally the Post-World War Two Agenda with the proposed International Clearing Union (ICU) and the proposed International Trade Organization (ITO). Both proposed organizations contain detailed provisions for establishing a world order on international commodity markets. He was very much concerned about the impact of price volatility of raw materials on global macroeconomics, and he was deeply convinced that appropriate regulations of international commodity markets and of national resource sectors would impact positively on peace, macroeconomic stability, employment and development. He was convinced that strong global governance must be based on simple, stable, effective, consensual and binding rules. On the basis of this Keynesian framework the "transparency agenda" is evaluated.
Now the "transparency agenda" with regard of international raw materials markets is so much debated, but it is a rather weak form of global governance, although it contains various proposals, voluntary agreements and codes of conduct. The "structural reform agenda" however represents a rather strong form of global governance of the global commodity markets and of the national resources sectors. It contains internationally binding agreements on investment, trade, exploration, production and use of resources, food security, and sustainable development. Also new global governance institutions are discussed based on the international public goods approach. In this essay the "transparency agenda" is discussed in great detail while the "structural reform agenda" is presented only in a short description in the Conclusions and Outlook section. The essay was published in the quarterly journal "Berichte" from the Research Institute of IWVWW e. V. in Berlin, the magazine of our partner institute (see Publications Karl Wohlmuth). A version of the essay will also be published in the IWIM Blue Series Discussion Papers (see IWIM Blue Series Discussion Papers). The "Structural Reform Agenda" needs a further elaboration in a follow-up paper.
How to Overcome the Hurdles on the Path to the "United States of Europe": A New Book by seven German Professors has just appeared
In a new book on overcoming the hurdles on the path towards the "United States of Europe" seven German professors intend to empower the readers to understand the complexities of forming a federal state in Europe. The book is also seen as an encouragement of all the initiatives to form a federal state in Europa what is also the intention of the Spinelli-Group project for a European Federation based at the European Parliament (http://www.spinelligroup.eu/). The authors of the book argue that the fiscal and financial crises in Europe request a new approach in handling the issues and in solving the major problems which appeared at the center stage after the global financial crisis of 2008/2009.
A New Book:
Towards "United States of Europe": Overcoming the Hurdles
K. Wohlmuth/W. Trillenberg/H. Matthes/U. Busch/O. Schwarz/J. Roesler/H. Engelstädter, 2013, Hürdenlauf zu den Vereinigten Staaten von Europa, Forschungsinstitut der Internationalen Wissenschaftlichen Vereinigung Weltwirtschaft und Weltpolitik e. V. Berlin, Reihe: Europäische Integration. Grundfragen der Theorie und Politik, Nr. 31, 2013, ISSN 1021-1993, Herausgeber: Prof. Dr. W.Trillenberg, Berlin: 2013, 262 Seiten
Economics Professor Karl Wohlmuth considers in his chapter the links between stabilizing the Euro system and forming a Political Union. According to his view, the discussion about the project "European Political Union" and the project "United States of Europe" is intensified in recent times, in political as well as in academic circles. This has various reasons: First, it is considered as necessary to deepen the European integration process because of the fact that various important policy areas are not yet covered. The sovereign debt crisis in Europe shows that fiscal policy is such an area where deeper integration is needed and that even common fiscal rules may be inferior to a full-scale fiscal union. Second, steps towards political unification are considered as vital in order to save the Euro in the long run, and so to prevent a collapse of this cornerstone of Europe's integration process, as it turned out that crisis management so far was not successful in Europe, mainly because of a serious lack of political cohesiveness. Third, the formation of the G20 group as a global decision-making body as well as of the BRICS (Brazil, Russia, India, China and South Africa) group as an important global actor show that Europe has to unify politically in order to impact on the decision-making processes on world economy and world politics affairs.
Experiences over more than forty (40!) months of hectic crisis management in Europe show that five issues are important and have to be addressed: first, the failure of the European Constitution process has quite negative effects on European integration and on the Euro crisis management as the Lisbon Treaty is not a full substitute; second, the economic policies in Europe are not coherent as there were no further steps towards a European Political Union and especially towards EU fiscal coordination and EU fiscal federalism; third, the European Central Bank (ECB) is overburdened with tasks because the balance between various economic policy actors in the EU and in the Eurozone is not granted; fourth, the lack of progress in further and deeper European integration is paralyzing decision-making processes in Europa and is as well leading to uneven and unsustainable growth patterns; and fifth, the neglect of all lessons gained over decades from the "political economy of reform politics" during crisis management in Europa has impeded seriously the overall outcome of crisis management.
It is shown in the chapter by Professor Karl Wohlmuth that these five properties of the unfinished European integration process have negative repercussions on Europe, and especially so on the Eurozone and the Euro. Therefore, concerted steps towards political unification and towards a realization of the project "United States of Europe" are inevitable in order to save the Euro, the Eurozone and the European integration process.