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Uncommon Decency

Dec 14, 2022

"Within our mandate, the European Central Bank (ECB) is ready to do whatever it takes to preserve the euro, and believe me, it will be enough." By uttering those three words, Mario Draghi saved the Eurozone from collapsing, thereby ushering Europe’s monetary policy into the 21st century. European fiscal policy, meanwhile, has not quite caught up. To this day, it still sticks with the treaty-enshrined limits to member-states' debt and deficit--the European Stability Mechanism (ESM)--albeit with varying degrees of fidelity. These days, the European Commission is proposing a new economic governance framework that would give member states greater flexibility on their spending plans and the Commission a larger role in the continent’s policy. This week we spoke to Rebecca Christie—a fellow at Bruegel—to discuss the Commission's proposal and the broader sweep of European economic policy. Rebecca is the author of an intellectual history of the ESM and a columnist for BreakingViews. This conversation got quite wonky quickly, as we rattled through arguments on capital markets unions, deficit targeting, bond spreads, tackling inflation, and Alexander Hamilton.

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