ABSTRACT
Just over five years into its existence, the European macroeconomic policy framework is in crisis. Targets are missed, discipline is lost, performance is flagging, and volatility is on the rise. As a result, even some of the more sensible newspaper columnists and pundits are suggesting that Europe should throw whole parts of the system out and start again. Despite the rising tension, however, the European Union’s (EU) framework for macroeconomic governance proves remarkably difficult to reform. Radical proposals are floated to great fanfare. However, they soon become watered down. And, once diluted, they are almost never fully implemented. To round it all off, popular recognition that Europe is just muddling through on the macroeconomic front deepens the sense of failure and strengthens the perception of crisis.
