Abstract
Before the launch of the euro, the proponents of European Economic and Monetary Union (EMU) thought that the single currency would lead to a rapid economic convergence among member states. Smaller country specificities would have reduced the need for domestic fiscal policies and the conduct of short-term economic policy could have been handed over mostly to the ECB. Fiscal binding rules would then have been justified. The macroeconomic success of EMU would have helped the convergence of industrial and social policies towards a liberal model (more labour market flexibility and product competition, reduction of the role of the state and public sector and less welfare spending). In return, the successes of these structural policies would have facilitated the coordination of stabilization policies.
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© 2008 Catherine Mathieu and Henri Sterdyniak
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Mathieu, C., Sterdyniak, H. (2008). How to Deal with Economic Divergences in the EMU?. In: Ferreiro, J., Fontana, G., Serrano, F. (eds) Fiscal Policy in the European Union. Palgrave Macmillan, London. https://doi.org/10.1057/9780230228269_8
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DOI: https://doi.org/10.1057/9780230228269_8
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-30161-4
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