Economic and Monetary Union in Europe and Constraintson National Budgetary Policies

Economic and Monetary Union in Europe and Constraintson National Budgetary Policies
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Volume/Issue:
1990/60
Series:
IMF Working Papers
Author(s):
International Monetary Fund
Publisher:
INTERNATIONAL MONETARY FUND
Published Date:
July 1990
DOI:
http://dx.doi.org/10.5089/9781451965278.001
ISBN:
9781451965278
ISSN:
1018-5941
Page:
24
This paper reviews the pros and cons of institutionalized constraints limiting the freedom of national budgetary policies within an Economic and Monetary Union (EMU) in Europe. The issue is approached from three angles: the influence of EMU on (i) budget discipline; (ii) intergenerational equity and intertemporal efficiency; and (iii) macroeconomic stabilization. The desirability of constraints on budgetary policy is related to the arrangements for EMU-wide monetary policy, the credibility of a no-bailout clause among member states, and progress in the area of supply-side policies.
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