Why should economic policy be a matter for deliberation at the EU level; why not leave it to member states? This chapter gives some answers to this important question by pointing to market failures and interdependence as justifications for government intervention and international policy cooperation with a view to enhancing common interests (section 1). Also, the chapter considers the subsidiarity principle (section 2), reviews the economic objectives of the EU as set out in the treaty (section 3), and interprets the EU and EMU as setting key parameters of an economic policy regime (section 4).
KeywordsMember State Public Good Market Failure Monetary Union Military Spending
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