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Mr. George Kopits
Pursuant to the Treaty of Maastricht, members of the European Union (EU) intend to participate in the Economic and Monetary Union (EMU), in part through convergence toward specified limits on the overall deficit and gross debt of general government. The paper argues that in several EU members, the financial imbalance of social security institutions may constitute an impediment to meeting these requirements. Given a constraint on further payroll tax increases, most countries will need to undertake major reform of public pension and health-care systems, to ensure adherence to the EMU fiscal criteria in the medium to long run.
International Monetary Fund
The 2005 Article IV Consultation for the United States reports that robust productivity growth and high corporate profits have contributed to a strong rebound in business investment and some acceleration in employment. The financial sector appears well positioned to provide continued support to the recovery. Equity prices have risen, long-term interest rates remain low, banks are well capitalized and highly profitable, and indicators of credit quality remain strong. The robust housing market has caused financial regulators to tighten oversight of home equity and other residential loans.
GEORGE KOPITS

WHAT are the causes and nature of the crisis faced by many social security systems around the world? And is there a case for reforming them in the framework of IMF-supported adjustment programs? Indeed, a cost-effective social security system that provides maximum protection at the least cost in terms of fiscal resources and allocative distortions would help ease the adverse impact of stabilization and structural reform efforts.