March 16th 2017

Europe and the euro.

Thomas Wieser, Eurogroup coordinator and president of the Eurogroup Working Group

As part of the MCI Alumni & Friends lecture series the Entrepreneurial School® had the honor to welcome “Mr. Euro”, Thomas Wieser. He outlined the effects of the US presidential elections, Brexit and other recent events on the European economy and the currency union in an impressive lecture.

The European Union and the euro: depending on one’s point of view, they represent a depressing or inspiring history. The EU has had to struggle with a number of crises in recent years, ranging from the financial crisis, which originated in the USA, to the debt crisis and finally the much-discussed Eurozone crisis. The latter is, however, not a purely inner-European issue, but affects all industrial nations. Wieser identifies specifically globalization as the driving force behind it. The entry of new, rising markets into international competition has presented a great challenge to the member states. The reaction of the EU states to these changing conditions is perceived by Wieser as being the origin of the Eurozone crisis.

Has the currency union regained stability today? According to Wieser this is not yet the case. Events such as the election of Donald Trump to the presidency of the USA or Great Britain’s decision to leave the European Union present the currency union with further challenges. Specifically Brexit has far-reaching effects on the European economic landscape and will shape its future – but to the advantage of neither the United Kingdom nor the European Union. Wieser does not expect any significant steps towards greater integration and free trade in the coming years awaiting the exit of the United Kingdom in 2019. These will largely be determined by the need to negotiate the conditions for the exit.

Wieser identifies the reason for the British vote to leave the EU as lying in the EU treaty, presenting a solution for all member states according to the principle of “one fits all”. This is contrasted with the necessity to offer different levels of integration – depending on the economic development and political goals of the individual member states. At the same time, Wieser considers it the individual member states’ responsibility to make the European Union a success.

The subsequent vigorous discussion was moderated by Markus Walzl of the Department of Economics, University of Innsbruck, thus concluding a very successful lecture.

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