Eurozone Governance. Reconciling the short and the long run: governance reforms to solve the crisis and beyond

The authors write that in September 2012 that the Eurozone was enjoying a relative period of calm. The current state of play, however, might prove dangerously misleading for at least two reasons.

First, the market's standstill is fraught with potential disruptions. EU leaders need to live up to their commitments and to reverse the deflationary dynamics crippling European economies.

Secondly, crisis management in the Eurozone lacks an anchoring in a long-term economic and political vision. Governance reforms need to be consistent with the much-needed transition towards a more balanced growth model delivering high employment, social inclusion and environmental sustainability. The institutional dilemmas and divisive trends brought abruptly to the fore by the crisis equally call for a more workable and legitimate EU.

This argument was at the core of a new policy brief co-authored by Policy Network and WIFO (the Austrian Institute of Economic Research). The publication provides recommendations on how to reconcile the short-term logic of crisis fighting and the long-term socio-economic challenges faced by Europe.