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Book abstract:
EMU is still in its infancy, and how it might grow towards mature adulthood is at the core of this book which comprises contributions from a distinguished panel of academics and policy-makers in the field of economics.
The overall structure of the emerging policy system is examined in the first two essays. The limitations of macro-economic policy co-ordination are examined by Otmar Issing, who also reviews the Maastricht Treaty and Stability and Growth Pact, and comments on the single monetary policy and ways in which it contributes to the stable policy framework in EMU. The important interdependencies of monetary and fiscal policy and why they might be better co-ordinated in the Euro area are explored in the following essay. Christopher Allsopp examines the relationship between monetary and fiscal policy and the reaction function of the ECB. Discussion then moves to the interaction between fiscal policy and labour market adjustments in the euro area. This aspect is continued in the following essay which explores policy questions that bridge the demand and supply sides of policy-making. Some of the current rules for economic governance are questioned in the contribution from Chris Huhne who urges an increased involvement in the scrutiny of policy by the European Parliament. The need to develop a more co-ordinated approach to representation of the euro in the international financial institutions and the G8 is addressed by Klaus Gretschmann. Policies to promote productivity and the slow pace of structural reform within the EU are examined by Diane Coyle and the following essay by Jacques Le Cacheux explores the long-run demographic change and the impact on pensions.
The overall view is that the system might be criticised as unsatisfactory and that it needs to be supported by some form of 'government economique'.
The work will interest all those engaged in European Studies and European Economics.
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