Understanding The European Economy

Following an introduction to the integration process? historical legal and political development, an overview of the institutional framework of the EU today will emphasize the choices and the principles underpinning the distribution of competences among different levels of governments as well as the peculiarities of the decision-making process. The course will subsequently delve into the analysis of the Union?s economic policies, which are divided into three main categories. First, the microeconomics of European integration will be explored, highlighting the effects of preferential trade liberalization and the construction of the Single European Market on the allocation and efficiency of productive factors, including an analysis of the labor market. The course will then turn to the size and the composition of the budget and how it is spent (i.e. expenditure policies, in particular the common agricultural policy); the policies that are aimed at correcting market failures (cohesion, regional and environmental policies) and, finally the external trade policy. The last part of the course will be concerned with the analysis of macroeconomics and monetary integration. It will first focus on the set of macroeconomic tools needed to understand why European countries have been struggling to maintain a degree of order and coordination in their domestic fiscal and monetary policies and how these efforts have finally resulted in the most ambitious monetary union ever attempted. It will proceed to analyze the monetary union?s institutional functioning and the set of constraints it poses on national fiscal policies. The course will end with a compelling overview of the financial and sovereign debt crisis that has gripped the EU over the last three years.