Flexibilisation of the Euro area : challenges and opportunities

This working paper explores the challenges and opportunities of a possible euro area flexibility clause. Such a clause, if introduced through a limited revision of the current EU Treaties, could be used to partially respond to one of the institutional challenges exposed by the Eurozone crisis, namely that member states (permanently) outside the euro area can block change desired by the member states within the euro area. It would provide an alternative to a comprehensive treaty revision and to going outside the treaties by concluding additional intergovernmental treaties.