Suchergebnisse

In debates about the future of the EU, the eurozone is regularly held up as a stable core element that could potentially deepen cooperation across broad policy areas. Undoubtedly the 12 EMU Member States have a keen interest in maintaining and consolidating the European Monetary Union as a framework for stability and growth. This makes it all the more alarming that regional economic cycles are putting serious pressure on the eurozone, generating major potential for political conflict. In June the Council of Ministers will ponder on the European Union's response to this problem. A European transfer mechanism to stabilise regional economic cycles could avert the danger of the Monetary Union breaking up. A European corporate tax scheme or a form of European unemployment insurance system, each of which would complement their respective national counterparts, would have the desired effect without increasing contributions. This would give Europe the kind of social component it is currently missing - a fact criticised in the debate about the European Constitution. (SWP-Comments / SWP)

The aim of this paper is to design the optimal institutional arrangement for a monetary union. Using a two‐country rational expectations model, the study analyses how the conservatism of the area‐wide central bank and the penalty system for fiscal deviation (Stability and Growth Pact) should be designed with respect to different economic shocks. The optimal institutional arrangement is also dependent on who is the 'leader' of the policy game. When national governments move first, the independent area‐wide central bank can exercise greater discipline over national fiscal policies, making the Stability Pact unnecessary.(J.E.L.: E58, E63, F42).

The forthcoming creation of a single European currency area will likely have farreaching impacts on the competitive position of European industries, as a result of a decline in transaction costs and currency risks for intra-European trade. These impacts will take place independent of the question whether the 15 EU countries form an Optimum Currency Area or not. The generally expected gains of trade from an integrated European market may therefore not be Pareto-optimal, as a monetary union may have significant distributional impacts on individual countries and regions. Then there will be winners and losers.This paper addresses the welfare impacts of a single European currency area by investigating industrial changes and shifts in location that may take place after the introduction of the EURO, based on the idea that fixed exchange rated in the EMU will be reflected in a decline in transportation costs and industrial clustering. The empirical analysis uses an extensive data set onindustrial production, interest rates and exchange rates in the various European countries.Two policy scenarios are envisaged, with a retrospective (backcasting)scenario on the likely effects ofa fixed exchange rate in the past anda fixed exchange linkage with the US dollar.Next, a neural network analysis is developed to trace for the two above mentioned scenarios the foreseeable and likely welfare effects of a single monetary union. It is concluded that the introduction of the EMU- according to the two past scenarios - would have worsened for most European countries the industrial competitiveness.