ࡱ> 685 xbjbj 4x   : $i622G  `ot#]|H]0422 : powerless europe: why is the euro area still a political dwarf ? Although Europes external representation in the field of economic policy is the subject of ongoing discussions, progress is being achieved at a very slow pace. There are two main reasons. First, the degree of European integration differs substantially, depending on both the policy and on the group of countries concerned. While some policies, like monetary, trade and competition, are within the competence of European institutions, others, like fiscal and structural policies, which are also part of international policy cooperation, remain largely the competence of the Member States. Furthermore, not all 25 countries currently participate to the same extent in policy cooperation and integration within the European Union. The most obvious case is that only 12 countries participate in the euro area. This makes the issue of external representation of economic policies quite a complicated endeavour. The second reason is that a unified European representation can be achieved only in exchange for the Member States own seats. Otherwise, the number of European representatives would unacceptably increase. As the Member States tend to believe their participation in international institutions and fora provides them with much prestige, they tend to oppose more unified European representation. This is why Europe is generally represented in a unified way mainly in informal or recently created fora, where the problem of national representatives having to leave their seats at the table does not exist. One consequence of Europes difficulty in achieving a unified representation is that it has much less influence over international policy issues than would be expected on the basis of its relative economic weight. This is particularly the case in international institutions like the IMF, where, as compared to the WTO, Europe is much less influential than the United States. Another consequence is that Europes inability to reduce its number of representatives and speak with one voice creates tensions with other major countries, who are denied an opportunity to gain more seats at the table. A more streamlined European representation, with only a single seat for the Euro Area (EA), would open seats for other countries that could then have a greater voice and greater visibility. The legitimacy and authority of international institutions is being challenged, which is detrimental to international policy coordination. Some fora, like the Group of 10, which was dominated for years by European representatives, have lost their relevance. The attached article, by Lorenzo Bini Smaghi, focuses on the euro area EA. It provides an overview of how the EA is currently represented in the most relevant institutions and fora, with a focus on the G7, the IMF and the G20.1 It then develops arguments in favour of stronger external EA representation, both from a functional and an institutional point of view. Finally, it explores a few avenues for potential improvements to the EAs external representation. First published in International Finance, September 2006 You can read the whole article in the pdf   "#'(/09:@B F J O R Z [ 6 ; o |  XrLMosvwx۹h( h/5^J h:h5^Jh/h[q5^Jh/h[q6^Jh/h(6^Jh[qh}^Jh[qh(^J h/^Jh[qh(^Jh[qh(5^Jh[qh(5^J h/5^J5BCD  ./CDMwxgd($a$gd[q$d7$8$H$a$gd[qd7$8$H$gd(21h:p}. 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