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The preceding papers amply demonstrate that an important step in the progressive integration of the European Union can be a compelling one without being an easy one. The transition to economic and monetary union (EMU) in Europe is precisely such a step. In this brief comment, I hope merely to show that, however powerful may be the case for economic and monetary union, passage to it is both generating institutional misgivings and entailing what could be institutional mistakes. I begin with the case for economic and monetary union, which I consider to be a very strong one indeed. Not many initiatives remain to be taken in the European Union that serve as many purposes lying so close to the heart of the European enterprise. In the first place, although one frequently reads that the "transaction costs" associated with multiple currencies have been exaggerated, the fact remains that those costs are not negligible and are in any event quite conspicuous. By definition, the more the single market succeeds, the more crossborder transactions there will be, with transaction costs commensurately increasing.

Leading American and European economists discuss monetary and fiscal policy from an international macroeconomic perspective in a companion volume to the NBER Macroeconomics Annual: cutting-edge research on macroeconomic issues and topical questions concerning the eastward expansion of the European Monetary Union.

Industrial fluctuations are closely related to the evolution of relative prices of produced goods and resources involved in production activity. Industrial fluctuations, as an expression of forces manifested in the real economy, are caused by changes in individuals' consumption and investment decisions, produced within expansionary monetary policies. The ease of obtaining a bank loan in the context of decreasing interest rates and of larger amounts of money caused an increase in individuals' demand for goods resulted from longer, capital intensive production processes. The rise in prices of intermediate and capital goods in a faster pace compared to the increase in prices of consumer goods is doubled by the increase of the share of higher order industries in the structure of production. The objective of this paper is to analyze changes in industrial structure of Eastern Europe countries within the policies of quick access to monetary resources. The analyzed states (Bulgaria, the Czech Republic, Hungary, Poland and Romania) are part of the European Union and have autonomous monetary policies, meaning that they have not yet adopted the common currency. In all economies analyzed, we find approximately the same patterns of monetary expansion and industrial fluctuations.

The paper uses survey data to analyze whether financial market expectations on government budget deficits changed in France, Germany, Italy, and the United Kingdom during the period of the Stability and Growth Pact (SGP). Our findings indicate that accuracy of financial expert deficit forecasts increased in France. Convergence between the European Commission's and market experts' deficit forecasts also increased in France, Italy, and the United Kingdom, particularly during the period after SGP's reform in 2005. Yet, convergence between markets' forecasts and those of the French, German, and It

This Bibliography is an output of the major research project dedicated to the European vocation and achievements of Pierre Werner, a former Prime Minister, Finance Minister and Foreign Minister of Luxembourg, unanimously recognised as one of the architects of Economic and Monetary Union. The first stage of the research was particularly focused on the plan for the establishment by stages of an economic and monetary union (more widely known as the Werner Report or the Werner Plan), drawn up by a group of experts chaired by Pierre Werner and officially presented on 8 October 1970 in Luxembourg.

Following the Brexit vote, the European Union (EU) is experiencing a deep institutional crisis. The economic theory of federalism may explain the causes of this crisis and suggest ways to overcome it. The core of the problem is that the EU has taken action in areas where it would have been preferable to leave the initiative to the Member States and that it has neglected to act in fields where the central level enjoys a comparative advantage compared to lower levels of government. The paper presents the economic criteria that may be used to decide the appropriate level of decision-making in a (quasi) federal union. It argues that political distortions have inhibited the use of these arguments and have consequently led to the current institutional crisis. Both market integration and the monetary union have become a goal in itself and are no longer connected to the original ambition of the Treaty to increase social welfare and guarantee a peaceful coexistence between the Member States. This article suggests a deregulation of market integration legislation and a reform of the Euro system, which are in conformity with the basic lessons of the economics of federalism.

ABSTRACTPeriods of dollar‐led global monetary tightening generate negative effects in many lower‐ and middle‐income countries. The tightening cycle which commenced in early 2022 has exacerbated the financial dislocation experienced by countries including Zambia, Sri Lanka and Pakistan. How can policy makers protect their economies from such external shocks and foster a stable developmental environment? Some recent contributions argue that the capacity of countries to insulate domestic policy from global financial conditions depends upon 'monetary sovereignty'. This contribution argues that this misrepresents the constraints to macroeconomic policy and development strategy. Monetary sovereignty, if narrowly defined, is necessary but not sufficient for domestic policy autonomy. Stronger definitions impose unrealistic requirements on debt denomination and exchange rate regimes. The authors argue that, outside of currency unions, the main policy constraints for developing countries are limited domestic productive capacity and integration into global trade and financial networks rather than monetary arrangements. The discussion is illustrated with an empirical examination of three recent episodes of global illiquidity and/or policy tightening: the 2013 taper tantrum, the March 2020 liquidity shock and the 2022 dollar tightening cycle. The authors find evidence that monetary sovereignty does not insulate a country from episodes of dollar illiquidity. While 'fundamentals' such as current account deficits and foreign exchange reserves provide limited power in identifying vulnerability, measures of financial depth and activity do appear related to vulnerability.

The banking union emerged from the June 2012 European Council as a new project expected to help and solve the euro area crisis. Is banking union a necessary supplement to monetary union or a new rush forward? The banking union would break the link between the sovereign debt crisis and the banking crisis, by asking the ECB to supervise banks, establishing common mechanisms to solve banking crises, and encouraging banks to diversify their activities. The banking union project is based on three pillars: a Single Supervisory Mechanism (SSM), a Single Resolution Mechanism (SRM), a European Deposit Guarantee Scheme. Each of these pillars raises specific problems. Some are related to the current crisis (can deposits in euro area countries facing difficulties be guaranteed?); some other are related to the EU complexity (should the banking union include all EU member states? Who will decide on banking regulations?), some other are related to the EU specificity (is the banking union a step towards more federalism?), the more stringent are related to structural choices regarding the European banking system. The banks' solvency and their ability to lend would primarily depend on their capital ratios, and thus on financial markets' sentiment. The links between the government, firms, households and domestic banks would be cut, which is questionnable. Will governments be able tomorrow to intervene to influence bank lending policies, or to settle specific public banks? An opposite strategy could be promoted: restructuring the banking sector, and isolating retail banking activity from risky activities. Retail banks would focus on lending to domestic agents, and their solvency would be guaranteed because they would not be allowed to run risky activity. Can European peoples leave such strategic choices in the hands of the ECB?

The banking union emerged from the June 2012 European Council as a new project expected to help and solve the euro area crisis. Is banking union a necessary supplement to monetary union or a new rush forward? The banking union would break the link between the sovereign debt crisis and the banking crisis, by asking the ECB to supervise banks, establishing common mechanisms to solve banking crises, and encouraging banks to diversify their activities. The banking union project is based on three pillars: a Single Supervisory Mechanism (SSM), a Single Resolution Mechanism (SRM), a European Deposit Guarantee Scheme. Each of these pillars raises specific problems. Some are related to the current crisis (can deposits in euro area countries facing difficulties be guaranteed?); some other are related to the EU complexity (should the banking union include all EU member states? Who will decide on banking regulations?), some other are related to the EU specificity (is the banking union a step towards more federalism?), the more stringent are related to structural choices regarding the European banking system. The banks' solvency and their ability to lend would primarily depend on their capital ratios, and thus on financial markets' sentiment. The links between the government, firms, households and domestic banks would be cut, which is questionnable. Will governments be able tomorrow to intervene to influence bank lending policies, or to settle specific public banks? An opposite strategy could be promoted: restructuring the banking sector, and isolating retail banking activity from risky activities. Retail banks would focus on lending to domestic agents, and their solvency would be guaranteed because they would not be allowed to run risky activity. Can European peoples leave such strategic choices in the hands of the ECB?