Policy assignment in the European union

EMU will see a re‐allocation of responsibility between different tiers of government for different elements of economic policy, yet policy assignment in the EU often reflects political compromises rather than dispassionate analysis or principles. This article explores the arguments for assigning responsibility for economic policy to different tiers of government in the EU. In the light of these arguments, the case for re‐assigning policy for prudential supervision of credit institutions, regulation of utilities and industrial policy is examined. This leads to the conclusion that closer economic integration will require potentially substantial changes in the assignment of policy.