The Stability and Growth Pact is under fire. Problems have appeared in sticking to the rules. Proposals to reform the Pact or ditch it altogether abound. But is the Pact a flawed fiscal rule? Against established criteria for an ideal fiscal rule, its design and compliance mechanisms fare...

Solid budgetary discipline is an essential condition for the success of Economic and Monetary Union (EMU). The “Excessive Deficit Procedure” and the “Stability and Growth Pact” allow some flexibility for the conduct of budgetary policies during severe economic slowdowns. The paper...

The Stability and Growth Pact has been under fire ever since it was born. But is the Pact a flawed fiscal rule? Against established criteria for an ideal fiscal rule, its design and compliance mechanisms show strengths and weaknesses. The latter tend to reflect trade-offs typical of...

Fiscal discipline to safeguard the credibility of the single monetary authority and fiscal flexibility to respond to country-specific shocks are two core principles governing budgetary policy in EMU. The Stability and Growth Pact aims at ensuring the first objective. To comply with the...

The Stability and Growth Pact is under fire. Some countries are meeting major problems in sticking to the rules. Proposals to reform the Pact or ditch it altogether abound. The alleged weaknesses of the Pact tend to reflect trade-offs typical of supra-national arrangements. This aspect has to be...

EMU is a completely new policy regime which has significant economic implications and which, it is hoped, will ultimately enhance the role of Europe on the world stage. EMU and Economic Policy in Europe takes stock of the initial experiences of EMU and assesses the challenges which will have to...