European Parliament - Eprs Policy Podcasts

In the EU, although economic policy is the remit of each individual Member State, there is, nevertheless, multilateral coordination of economic policies between Member States. This framework was put severely to the test during the global financial crisis and the European sovereign debt crisis. Partly as a result, recovery in the EU was slower than recovery in the United States, and was not achieved equally by all Member States. Furthermore, it has to a large extent been based on accommodative fiscal and monetary policies that only partly hide underlying signs of fiscal or financial fragility in some Member States. To remedy this, the European institutions began a twofold process in 2011: initiatives were taken to strengthen the current framework for economic governance, and for banking supervision in the euro area while, in parallel, discussion began on possible ways to reduce the economic divergences between Member States, provide incentives for risk reduction and risk-sharing, render the governance process