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The Euro: Past Successes and New Challenges

Published online by Cambridge University Press:  26 March 2020

Marco Buti  and
Paul van den Noord
Marco Buti*
Affiliation:
Directorate General for Economic and Financial Affairs, European Commission
Paul van den Noord*
Affiliation:
Directorate General for Economic and Financial Affairs, European Commission
*
e-mail Marco.Buti@ec.europa.eu
e-mail Paul.VANDENNOORD@ec.europa.eu
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Abstract

The successes of the first decade of European Economic and Monetary Union are impressive, but it is fair to stress these were achieved in a relatively benign economic environment characterised by steady global growth, supportive financial conditions and fiscal windfalls associated with booms in asset markets. Although all this has come to an abrupt end with the financial crisis, there is a silver lining of fiscal stimulus being more effective in EMU than without the single currency, with offsetting exchange rate responses absent, trade multipliers stronger and the fiscal framework credible. But the financial crisis also clearly demonstrated the need for stronger coordination of national policy actions to internalise cross-border spillovers. Meanwhile, the European Commission has a major role to play in striking the right balance between short-term emergency measures and longer-term priorities. Against this backdrop, this article sheds light on the longer-run challenges and the policy agenda for meeting them.

Keywords

Monetary unioneconomic governanceEuropean UnionE60F50H00
Type
Articles
Information
National Institute Economic Review , Volume 208: Ten Years of EMU , April 2009 , pp. 68 - 85
Copyright
Copyright © 2009 National Institute of Economic and Social Research

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Footnotes

∗

The authors have written this article in a personal capacity. The views expressed are not necessarily those of the European Commission.

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