Disequilibria Management at the Euro Area Level

• Author: Camelia Milea, Floarea Iordache, Alina Georgeta Glod, Adina Criste, Iulia Lupu
• Pages: 187-194

Performance and Risks in the European Economy

187

Performance and Risks in the European Economy

Disequilibria Management at the Euro Area Level

Camelia Milea

1

, Floarea Iordache

2

, Alina Georgeta Glod

3

, Adina Criste

4

, Iulia Lupu

5

1

Financial and Monetary Research Centre „Victor Slăvescu”, camigheorghe75@gmail.com

2

Financial and Monetary Research Centre „Victor Slăvescu”, alina.glod@gmail.com

3

Financial and Monetary Research Centre „Victor Slăvescu”, alina.glod@gmail.com

4

Financial and Monetary Research Centre „Victor Slăvescu”, cristeadina@yahoo.com

5

Financial and Monetary Research Centre „Victor Slăvescu”, iulia.lupu@gmail.com

Abstract. The current crisis has shown that an economic integration through a political and monetary

approach is wrong. It seems to be more appropriate a social and economic approach, meaning both a better

preparedness of the new countries joining the euro area and more flexibility of the economic structures of the

old members of the euro zone, in order to make the more "harmonious" the wa y of the monetary area

operation. For that purpose, this article has made an analysis of the imbal ances management issue in the euro

area in order to provide a f ew theoretical solutions for a better functioning of the Economic and Monetary

Union (EMU), b ased on the observation of developments in the euro area countries. This paper enriches the

economic literature, but a lso it is relying on the research workings made by the authors in the field of

European integration. The originality of this article arises from the extremely topical issue examined and its

way of approach, but also from the conclusions outlined.

Keywords: financial - economic crisis; disequilibria; macroeconomic imbalances; European integration

1 Introduction

The euro area is composed of countries that, over the years, have developed divergences caused by

the differences regarding economic structures, fiscal policy conduct, or the level of economic

development. The difficulties faced in the recent years by the euro area, particularly by those

countries from the periphery, put into the question the stability of the European monetary zone

functioning. Promoting the idea of monetary unification has considered both a political goal (that to

boost integration) and an economic one – according to which a monetary integration would stimulate

the economic convergence, too. The global financial and economic crisis has created new challenges

for the euro area authorities, hampering further the resolution the existing macroeconomic

imbalances.