Suchergebnisse

There are differing views about the need for economic policy coordination in the EU and about the adequacy of the system that has evolved under EMU. This article examines the case for such policy coordination, then describes and assesses the current arrangements for both 'hard' coordination — epitomised by the much-maligned Stability and Growth Pact (SGP) — and the 'soft' forms of coordination that have evolved in the EU to complement formal rules. Although the system achieves more than is sometimes recognised, it is shown to have weaknesses. Options for reforming the SGP and other facets of the system are discussed.

The launch of European Monetary Union (EMU) marked the beginning of a new era, and its establishment has proved an impressive success at the technical, legal, and procedural level. After all, EMU has accelerated economic and political integration in the European Union and tied the economies of the Member States closer together. However, the performance of the euro, high unemployment rates, uneven output and investment growth, and the issue of structural reforms that have yet to be tackled have raised questions about the performance of EMU in practice. There is a general consensus on the justification for economic policy coordination. The existing literature on economic policy coordination, however, seems far from able to provide robust conclusions about how to organize the necessary interaction of institutions and policies. Therefore, there seems to be a case for re-examining the subject under the new framework set by EMU. The objective of such a reassessment is to enhance the understanding of what type of coordination and what institutional setting for policy coordination can be expected to be most favorable. Challenges for Economic Policy Coordination within European Monetary Union provides an intellectually stimulating contribution to the ongoing debate

SINCE 1985, INTERNATIONAL COOPERATION HAS INVOLVED MONETARY AUTHORITIES, PARTICULARLY CENTRAL BANKS, TO AN UNPRECEDENTED EXTENT IN COORDINATED ACTION IN THE FIELD OF MONETARY AND EXCHANGE RATE POLICIES. THIS FACT HAS INFLUENCED THE AUTHORS' APPROACH TO THE ISSUE OF ECONOMIC POLICY COORDINATION (EPC). THEY DO NOT OFFER A NEW MODEL OR PROVIDE A COMPREHENSIVE THEORETICAL EXPLANATION FOR THE EVENTS OF 1985-88. RATHER, THEY DESCRIBE THE PROBLEMS AND THE ACHIEVEMENTS OF EPC AS SEEN BY PRACTITIONERS OF EXCHANGE RATE AND MONETARY POLICY COORDINATION. THE FIRST SECTION OF THEIR PAPER BRIEFLY SURVEYS THE LITERATURE ON POLICY COORDINATION. THE SECOND SECTION DISCUSSES A NUMBER OF ISSUES THAT ARE CRUCIAL TO THE FEASIBILITY OF POLICY COORDINATION. THE THIRD ASSESSES THE OUTCOME OF THE EPC EXERCISE IN 1985-88, FOCUSING ON THE REACTIONS OF MONETARY AND FINANCIAL MARKETS TO THE IMPLEMENTATION OF THE COORDINATED STRATEGY, BOTH WITHIN THE G-7 AND THE EMS.