82005 - Economics of the EU

Course Unit Page

  • Teacher Riccardo Rovelli

  • Credits 8

  • SSD SECS-P/01

  • Teaching Mode Traditional lectures

  • Language English

Academic Year 2019/2020

Learning outcomes

The course is an introduction to the ECONOMICS and POLITICAL ECONOMY of the European Union. Special importance is given to the economic, political and institutional prerequisites of EU integration and enlargement – and to the consequences that integration and enlargement have on member states. Hence, students will become familiar with concepts and models of economics and political economy that are especially useful for understanding and evaluating these processes and the policies that accompany them. One third of the course is dedicated to the institutional and policies innovations adopted since 2008, during the Great Recession.

Course contents

Introduction: Organization and Overview (1 lecture)

1. Overview: What is the EU? Why is it this way? What has the EU achieved? (3 lectures)

  • A project with no strategy: Main steps in the integration process
  • EU institutions and their powers
  • The role of Member States
  • The Internal Market. Principles and Rules
  • Enlargement
  • EMU
  • From divergence and the Financial Crisis to the Great Recession, Sovereign Debt Crises and Austerity
  • Institutional adaptations after the crisis
  • Brexit. Other challenges

2. The Internal Market (2 lectures)

  • The IM for goods. Steps towards integration
  • The political economy of the IM
  • Measuring integration
  • Measuring productivity
  • Why is productivity lagging?
  • The IM for services. Why a different story?
  • Factor markets integration
  • Financial markets integration – in a MU

3. Complementing the IM (4 lectures)

  • Taxation
  • Trade policy. Brexit again
  • The Budget
  • Regional policy and Structural Funds
  • Social Europe

4. EMU - The First Ten Years (3 lectures)

  • Why EMU? Theories and motives for monetary integration
  • The political economy of establishing EMU
  • The initial design: independence, mandate, convergence criteria
  • The political economy of an incomplete MU
  • Monetary Policy in practice: The first ten years
  • Decentralized Fiscal Policy and the SGP

5. EMU - The Next Ten Years: Recession, Crisis, Adaptation (6 lectures)

  • Building up real divergences
  • From the financial crisis to the Great Recession, to the Sovereign crises
  • The EU and EA responses. Why so less effective than in the USA?
  • What is austerity? Did it work?
  • Non-standard MP. Design and outcomes
  • The political economy of non-standard MP
  • Back to normal MP? The challenges
  • Completing EMU. After the Five Presidents’ Report
6. Theories and motives for EU integration. A reconsideration (1 lecture)


Lecture notes and other required readings and documents are available in a dedicated Dropbox directory.

Required readings include also selected chapters in:

BW: Baldwin,Richard and Wyplosz, Charles (2015) The Economics of European Integration. McGraw Hill, 5/e.

DG: De Grauwe, Paul (2016) Economics of Monetary Union. Oxford UP, 11/e.

  • Part 2: BW ch.7.
  • Part 3: BW ch.12.
  • Part 4 & 5: DG chs. 4-10.

The Drobox directory also contains "additional" readings (in "ADD" sub-directories) on all the topics discussed in class: these readings are not required but may be consulted before writing the required essay.

Teaching methods

Lectures will be supported by PC-based presentations. Students should download and read these presentations (and possibly the related readings) before lectures.

Students are encouraged to take an active part in many class discussions. Class discussion and interactions will be enhanced through the use of “Kahoot” or “Wooclap”.

Students will be encouraged to search for and obtain relevant information (data; official documents; academic literature; policy analyses) through the Internet.

Assessment methods

Attendance is compulsory, except for Erasmus outgoing students.

Attendance is satisfied when a student attends at least 14 out of the 20 classes.

All students are required at the beginning of the course to pass a Fitness Test (no marks). The purpose of this test is to verify their ability to search and download data from appropriate Internet sources and to produce simple data presentations.

Attending students ("frequentanti") are required to pass two written tests and to deliver an essay.

Students not attending will take a single written test in a regular exam session.

The structure of the exams is described below in more detail.


FITNESS TEST ("Idoneità")

All students must pass a fitness test, under the guidance of the instructor. The test (which does not contribute to the final marks) requires to:

a) download quantitative data from a reputable source (Eurostat, ECB, OECD, IMF, National Statistical Services or Central Bank, etc...);

b) perform simple operations on those data in an Excel file;

c) prepare a "user friendly" table and graph to summarize the main characteristics of the data examined;

d) write a short comment (250 words) describing the main stylized facts that can be observed by the data.

The fitness test can be done at any time (at home) before the intermediate written test (see below)

FOR ATTENDING STUDENTS ("Studenti frequentanti"),

The final mark is equal to the sum of the points obtained from three evaluations:

  • Intermediate written test (prova intermedia - max 11 points)
  • Final written test (prova finale - max 11 points)
  • Essay (max 11 points).

If points are equal to 31 or more, the final mark is 30 cum laude.

Intermediate and Final written tests:

  • Short answers (max. 250 words) to 4 open questions (out of 5).
  • Each answer is valued up to 2,75 points.
  • Exams take place at Labic.
  • One exam may be missed exclusively for grave reasons (to be authorized explicitly), in which case it will have to be taken in the first “appello di esami” in the June session.

Essay: no more than 5000 words long / 10 pages with font calibri 12, single spaced)

  • Essays must be written in English.
  • Topics will be chosen under the guidance of the course instructor. In general, they should relate to a topic discussed during lectures.
  • Essays must be delivered by e-mail with a .pdf file, before the first “appello d’esami” in June.

STUDENTS ADMITTED TO THE EXAM WITHOUT HAVING ATTENDED CLASS (Erasmus outgoing) ("Non frequentanti") will take a single written exam in any regular exam session (prova totale).

  • The exam will require short answers (max 250 words) to 6 (out of 7) open questions.Each question is valued up to 5,5 pts.
  • Topics and readings are the same as for attending students.
  • No essay required.


For all students, a positive grade (greater than or equal to 18/30) may be refused only once. A new exam must then be taken in the next exam session, in the format of "not attending" students.

Teaching tools

Detailed lecture notes cover all topics included in the course. They are available on a Dropbox directory that will be shared with students (A link will be given during the first class).

Lecture notes provide the basis for the lectures delivered in class, and for the ensuing discussions. Students are advised to download and read these notes (and possibly the related readings) before lectures.

Class interactions will be enhanced through the use of Kahoot or Wooclap.

Office hours

See the website of Riccardo Rovelli