Abstracts » Business, international

The euro's first test

Article Abstract:

European monetary union (EMU) has started smoothly in Jan 1999, but there are still risks of problems from fiscal policy. EMU involves an agreement on fiscal restraint which could lead to an excessively tight fiscal policy. Recessions lead to unemployment and capacity lying idle, and looser fiscal policy helps ease the problem. Monetary policy can no longer be varied on a national basis, which means that there is a case for greater flexibility with regard to fiscal policy.

International Affairs, European Community, Fiscal policy

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Eleven into one may go

Article Abstract:

European monetary union is scheduled to start on Jan 1 1999, and countries taking part have given authority to the European Central Bank (ECB) to have power over the new currency. The ECB has to maintain the stability of prices as its brief, and is independent of the member states of the European Union (EU). There are 11 members of the project, and the United Kingdom is not taking part. There is no provision for the withdrawal of any member once the project has started.

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