ECONOMICS YEARLY REVIEW

equires detailed specification of these medium-term processes to become operational and
to achieve its declared goals.
Key words: Economic and Monetary Union, Banking Union, Capital Markets Union JEL
classification numbers: E60, G01, E44, E51
SUMMARY: 1. Introduction. - 2. The unsatisfactory economic record of the euro zone. 3. - The 5PR proposals
to ensure a ‛genuine’ EMU. - 4. The key role of the Financial and Capital Markets Unions (CMU) and
the issue of the right approach: law changes (5PR) or bottom-up model (Commissioner Hill)? - 5. Conclusions.
1. The objective of a European EMU of stable prices, open markets, shared
prosperity, employment, innovation and sustainable growth has been advocated and
actively pursued for a long period. The official approach to EMU dates back to the Summit
Meeting in the Hague in 1969. The Monetary Union was achieved at the end of last
century, after the signing of two Treaties with a strong economic and fiscal content
(Maastricht, 1992 and Amsterdam, 1997). The thirty years between 1969 and 1999 cover
what I call here Phase 1 of EMU (Appendix 1).
The following fifteen years (2000-June 2015) span Phase 2, which refers to the operation
and workings of the independent monetary policy of the ECB, the signing of many Pacts of
economic nature, the build-up of the Great Financial Crisis (2007-2009) and a subsequent
repair and recovery period, notably with the creation of the Banking Union (BU) (2013).
Much has been achieved and major difficulties were overcome during the past half
century. But the track record, especially in Phase 2, makes it legitimate to ask whether the
policies adopted, in particular during the operation of the euro, have been appropriate
and, if not, what changes are required. In any event, the task of ensuring a true and
genuine economic union overcoming the difficulties of monetary unification in a nonoptimal
currency area has not been accomplished. This strong proposition is, somewhat
paradoxically, a conclusion which can be found in an official, highly important document of
the EU: the “Five Presidents’ Report” (5PR) of June 2015 (Juncker et al., 2015). This paper
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