KFG Working Paper No. 52 "Political Legitimacy in a Non-optimal Currency Area" by Fritz W. Scharpf has been published.

 

Fritz W. Scharpf's paper is a counterfactual and hypothetical assessment of the new Euro regime: Could it have prevented the  current crisis - and is it able to tackle its disastrous economic and social consequences? Scharpf reconstructs the path that led to the Euro crisis and discusses whether the new Euro regime - had it already been in place - could have stopped the crisis from developing. The effects of the austerity- and supply-side-focused current regime are compared with the likely impact of transfer-based Keynesian reflation. Neither the former nor the latter is a panacea: Their economic success is uncertain, while both approaches are likely to produce severely negative side-effects. The current Euro regime's lack of political legitimacy represents a particular challenge - but attempts to politicize European election campaigns might prove dangerous, too.

 

All KFG Working Papers are available online or can be ordered in print via transform-europe@fu-berlin.de