The course aims at providing basic analytical tools for the understanding of the process of European integration, European institutions and European policy-making. Its main objective is to enable students to develop a critical comprehension of the inner functioning of the European Union’s economics and politics. Students will examine how the European institutions have addressed the three different crisis that the Union has faced in the last fifteen years: the sovereign debt crisis, the pandemic crisis and the energy crisis. Furthermore, students will examine the different European institutions and their changes over time, as well as their relationship with national institutions. Special emphasis will be placed on the interaction between one monetary policy conducted by the European Central bank (Ecb) and twenty different fiscal policies established by the member States of the Euro. What are the major implications of a Monetary Union which is not a Fiscal Union nor a political Union like the United States? The course concludes with a description of the expansionary monetary policy and the expansionary national fiscal policies put in place during the pandemic crisis. New instruments - such as the Quantitative Easing, the European Banking Union and the Next Generation EU - will be analyzed. Special attention will be given to the digital and green transition carried out by the European Union: instruments (for example the repower EU), resources and achievements of each Member States will be evaluated. Progress made in terms of gender equality, which is one the key pillar of the ESG strategy for Europe, will also be assessed. Another goal of the class is to study and understand the role of European democracy and its interaction with national political environments. The rise of populism in Europe in recent years will be taken as an example to assess how economic developments and policy decisions taken at the European level impact local politics, including election campaigns and the formation of coalition governments. Throughout the class, students will learn how to collect and scrutinize economic data so as to be able to identify possible correlations between time-series and assess different hypotheses explaining key economic and social developments.

Knowledge and understanding: By the end of the course, students should be able to: • develop a critical comprehension of the inner functioning of the European Union’s economics and politics and how they influence and impact social interactions and human behavior • understand different European institutions and their changes and challenges over time, as well as their future prospects • comprehend the role of European democracy and its articulate interactions with national political environments Throughout the class, students will learn how to collect and scrutinize economic data so as to be able to identify possible correlations between economic time-series. Applying knowledge and understanding: Upon completing the study program, students will be able to: • evaluate the impact of future changes in the European institutional architecture • assess and interpret different hypotheses explaining key economic, political, and social developments. • effectively communicate and work, as an expert in European issues Making judgements: Upon completing the study program, students will be able to: • present an informed scientific opinion in the public debate concerning institutional arrangements and policy decisions in the European Union. • apply reasoning in the main European subjects, thanks to the understanding of the economic and political aspects of European fiscal and monetary policies issues • gather and interpret information and data from different sources, in order to make judgements in an independent way • prepare original research supported by relevant bibliography and data analysis, and debate different perspectives to address the issue. Communications Skills: Upon completing the study program students will be able to: • develop the ability to communicate in oral form through the final exam. • use the notions and the communication of European institutions • foster the development relational skills in international and multicultural settings • participate in a public policy debate, by researching and expressing expert opinions Learning skills: Upon completing the study program, students will be able to: • build an analytic toolbox from both economic and policy analysis • solve problems in dynamics settings and develop critical positions This ability will be acquired through class participation, class debate, and research carried out for the drafting of the written assignment

The course is divided into four main parts. The first part explores the criteria for joining the European Union and the European Monetary Union. The second part provides a critical evaluation of European fiscal and monetary policy. We will start by analyzing the evolution of European fiscal rules, from the Maastricht Treaty to the Fiscal Compact and the new Pact, discussing arguments in favor and against budget policy, and will examine the ways in which Europe has addressed the former financial crisis through fiscal policies, and how they have consequently evolved. A comparative analysis with the United States shows the complexity entailed in combining one monetary policy and twenty distinct national budgets. Moreover, we will discuss the economic implications and the political constraints of amending Treaties and the possible window of opportunity for an institutional reform of the European Union. The monetary policy, structure, nature, and objectives of the European Central Bank, as well as the creation of the Banking Union, will be analyzed in detail. We will pay particular attention to new, non-conventional monetary instruments such as the Outright Monetary Transaction (OMT), the Security Market Program (SMP), Quantitative Easing (QE) and the Transmission Protection Instrument (TPI). The third part of the class comes to grips with the bail-out programs implemented in five European countries (Greece, Ireland, Portugal, Spain, and Cyprus). We will consider successful examples, such as Spain and Ireland, as well as Greece and Portugal, the more problematic ones. The goal is to analyze specific cases of national crisis which have rapidly become European crisis through the inevitable contagion effect. The rise of populist parties in many European countries, one of the key challenges in Europe right now, will also be addressed. The last part provides an evaluation of the new instruments introduced during the pandemic crisis (Sure for the labor market, Pandemic Emergency Purchase Programme, Next Generation EU, European Stability Mechanism for the health sector) and the current energy crisis (Repower Eu). Green and Digital transition: (challenges, instruments, and obstacles at national levels) will also be examined. Special attention will be given to the ESG strategy for Europe: action plan, resources and future challenges. The course concludes by looking at the next steps in the process of European integration: how far away (and how difficult) is the creation of a true Political Union in Europe, like that of the United States? Are the 27 Member States ready to give up more sovereignty? And, if so, in which areas? If further steps are not accomplished, what are the risks of moving backwards? What are the risks of a potential disruption of the Euro? Should the U.S. be more engaged with the current European situation in light of the broader geopolitical risks?

Required textbook: De Romanis, Bitetti, The European toolbox, LUISS University Press, forthcoming We will provide slides for each class in advance. Further readings, related to ongoing economic and political developments, will be assigned in class or provided to students through the MyLuiss platform A list of suggested readings is provided for each class in the extended readings in myLuiss In order to have a general and analytical view on the economic workings of the Euro area, we also recommend one of the following textbooks: De Grauwe, Paul Economics of Monetary Union, Oxford University Press, Thirteen Edition 2020 Baldwin, Richard, and Charles Wyplosz.  The Economics of European Integration 5e. McGraw Hill, Seventh Edition, 2022. Students are expected to read the papers/articles assigned each week, and to independently read from institutional websites and main newspapers. Please consult: • European Commission, European Economic Forecasts, Statistical Annex • IMF fiscal monitor • World Economic Forum statistical appendix

Slides will be available one week before the lesson covering each of the specific topics addressed in the course. Hence the traditional presentation of the analytical problems can be concise and leave room to Q&A and discussions. Guests will give a lecture on European Monetary Policy (name to be announced)

The assessment of students learning will be based on: 70% Oral exam 30% work in class: Multiple choice test, 2 dates will be indicated at the beginning of the year Class participation: up to 2 bonus points Students are encouraged to actively participate in each class by asking questions for discussion or clarification and by engaging with their peers during presentations. Please note that a strong background in economics is not required for participation—there is no such thing as a bad question, and all questions are welcome. NON ATTENDING STUDENTS: Oral exam, 70% Commentary piece, 30% Commentary piece Individual elaboration of an editorial, in newspapers style (6.000 characters), as a response to an article on the topics discussed in class published in the school term The article would be a detailed analysis or editorial concerning some recent economic development or policy proposal. You can spot mistakes in the economic reasoning by the author, or you can comment using concepts studied in class. Please be aware that as an economic post, data analysis, i.e. the ability of supporting opinions with data, time-series comparisons, and statistical or basic econometrical analysis, is highly valued. Maximum lenght: 6000 characters If the paper is not delivered by email at least 10 days before the oral exam, it will be considered insufficient in the final grade. If the use of AI is detected, the commentary piece will be graded 0. PLEASE NOTE Grades for class participation and presentation are only valid for winter session, immediately following classes. If students fail to pass the exam, in the subsequent sessions (summer and fall) they will have to pass the exam with the same requirements as not-attending students.

Students, who successfully completed the exam, can become candidate for a Master thesis relating to European economic problems. In order to start the process, the potential candidate has to send an e-mail suggesting possible specific topics in this field. The receiver of this mail will propose a meeting to the potential candidate. At the end of the meeting the teacher will either agree to become the supervisor of this thesis or motivate the reasons of his refusal.