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The Lisbon strategy, macroeconomic stability and the dilemma of governance with governments; or why Europe is not becoming the world's most dynamic economy

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  • Stefan Collignon

Abstract

Due to collective action problems, the Eurozone is stuck in a sub-optimal macropolicy mix of too expansionary fiscal policy and too restrictive monetary policy. Although the Lisbon strategy pays lip service to macroeconomic policy coordination, no mechanisms, institutions or effective rules are established in order to overcome the collective action problem. Empirically, the failure is demonstrated by comparing the Eurozone policy mix with the US policy mix and attributing it to the low investment performance which resulted in low average GDP growth and low average productivity growth – contrary to the aims of the Lisbon strategy to make the EU the world's most dynamic economy. The paper also argues that in order to overcome these difficulties, a proper government for the EU is needed. More delegation to the European level is legitimate only if European citizens can exert their democratic rights.

Suggested Citation

  • Stefan Collignon, 2008. "The Lisbon strategy, macroeconomic stability and the dilemma of governance with governments; or why Europe is not becoming the world's most dynamic economy," International Journal of Public Policy, Inderscience Enterprises Ltd, vol. 3(1/2), pages 72-99.
    • Handle: RePEc:ids:ijpubp:v:3:y:2008:i:1/2:p:72-99
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    Citations

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    Cited by:

    1. Arne Heise & Özlem Görmez Heise, 2010. "Europäische Wirtschaftsregierung - Notwendige Ergänzung der EWU oder unrealistische Illusion?," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 36(3), pages 325-347.
    2. Arne Heise, 2014. "Zwangsjacke Euro. Die Fehlkonstruktion des Europäischen Economic Governance-Systems," Wirtschaft und Gesellschaft - WuG, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik, vol. 40(1), pages 17-31.
    3. Pusch, Toralf & Heise, Arne, 2008. "Central Banks, Trade Unions and Reputation – Is there Room for an Expansionist Manoeuvre in the European Union?," MPRA Paper 19719, University Library of Munich, Germany.
    4. Mihut Ioana-Sorina, 2015. "Challenges Of The Recent Financial Crisis Upon The European Union Economic Governance," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 3, pages 218-223, June.
    5. David Natali, 2009. "The Lisbon strategy a decade on: a critical review of a multi-disciplinary literature," Transfer: European Review of Labour and Research, , vol. 15(1), pages 111-137, February.
    6. Pusch, Toralf, 2008. "EZB contra Gewerkschaften? Mit Reputationsaufbau zur Vollbeschäftigung in Europa," Working Papers on Economic Governance 29, University of Hamburg, Department of Socioeconomics.
    7. Stefan Collignon, 2010. "Policy Challenges for Euroland over the Next Decade," Revue d'Économie Financière, Programme National Persée, vol. 96(1), pages 115-123.
    8. Ebert, Werner & Eckardt, Martina, 2011. "Wirtschafts- und finanzpolitische Koordinierung in der EU – Erfahrungen aus einem Jahrzehnt Politikkoordinierung [Public policy coordination in the EU - experiences from one decade of policy coordi," MPRA Paper 29281, University Library of Munich, Germany.
    9. Stefan Collignon, 2010. "Les enjeux pour la zone euro dans les dix années à venir," Revue d'Économie Financière, Programme National Persée, vol. 96(1), pages 121-131.

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