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Boom‐bust cycles in the eurozone periphery almost toppled the single currency and recent experience suggests that they may return soon. We check whether monetary or macroprudential policy could have prevented the periphery's violent boom and bust after the euro adoption. We estimate a DSGE model for the two euro area regions, core and periphery, and conduct a series of historical counterfactual experiments in which monetary and macroprudential policy follow optimized rules that use area‐wide welfare as the criterion. We show that single monetary policy could have better stabilized output in both regions, but not the housing market or the periphery's trade balance. In contrast, region‐specific macroprudential policy could have substantially smoothed the credit cycle in the periphery and reduced the build‐up of external imbalances. [ABSTRACT FROM AUTHOR]

This article analyses from a law and policy perspectives the measures adopted by the European Union (EU) to address the devastating economic effects of COVID‐19, assessing their implications for Europe's economic and monetary union (EMU). The article first sets the background by exploring the main features of EMU before COVID‐19. Subsequently, it examines the multiplicity of policies deployed by the EU institutions to contain the socio‐economic damages of the pandemic – including, most crucially, the EU recovery fund "Next Generation EU" – and underlines their transformative effect on the EU architecture of economic governance. As the article argues, the responses to COVID‐19 have produced a significant rebalancing of EMU, bridging the asymmetry between EU monetary and economic policy. Finally, the article considers whether the COVID‐19‐related responses are likely to be only temporary, or rather a new normal for EMU, and sheds light on further constitutional adaptations which are needed to sustain this unprecedented transfer of fiscal power to the EU level. [ABSTRACT FROM AUTHOR]

This paper provides a welfare-theoretic explanation of the inferiority of area-wide policies, com- pared to their country-specific equivalents, in the case when shocks spread unevenly across regions. Our analysis points out that under union-wide policies, regions which suffer relatively more from shocks will benefit from policy interventions at the expense of others. Using the new-Keynesian framework we propose a new area-wide welfare-theoretic loss function which is heterogeneity-consistent, i.e. it guarantees the same outcomes as if a policy maker was targeting each of the regions individually. We study the dynamics of the theoretically-induced losses resulting from the area-wide policies using the example of the euro zone in the years 1999-2013 and compare it with the level of money market integration. Our study suggests that more intense financial integration was associated with smaller long-run average losses from heterogeneity-inconsistent aggregate policies. We find no similar effects for short-run dynamics. [ABSTRACT FROM AUTHOR]

Abstract: Governance of monetary and fiscal policy have followed diverging paths. Since the late 1980s monetary policy has been delegated to independent central banks. By contrast, fiscal stabilization remained in political hands but has progressively been constrained by rules; the Stability and Growth Pact in the EU is a prominent case in point. While delegation and independence eliminated the inflation bias, fiscal policy still suffers from a deficit bias as enforcement of rules remains difficult. A logical extension of all attempts to progressively tie the hands of politics would be to carve out the stabilization function from the broader field of fiscal policy and to delegate it to national independent fiscal councils. Apart from addressing the political economy behind the deficit bias, such a step would facilitate a better co‐ordination of macroeconomic policies in Economic and Monetary Union. [ABSTRACT FROM AUTHOR]

The present paper has focused attention on a number of concrete proposals suggested by these developments and susceptible of early negotiation and implementation. The steps proposed in the first two Sections involve no mutual credit commitments whatsoever and should, therefore, prove acceptable to most, or even all, countries of Latin America. They aim: 1. in Section I: at diversifying the present pattern of reserves investment abroad, and at maximizing earnings on such investments; 2. in Section II: at reducing the recently increasing net outflows of expatriate capital from Latin America, at stimulating partial repatriation of such funds and, more generally, at exploring more systematically the new opportunities for foreign borrowings arising from the reactivation of European capital markets (Eurocurrency markets, security flotations in foreign currencies and in units of account, etc.). The intra-regional credit commitments and inseparable measures of policy harmonization involved in the last two Sections are not likely to prove immediately negotiable among all Latin American countries, and have been explored primarily in the context of the Caribbean area. They could, however, be adjusted to similar sub-regional agreements among other countries, and should, in any case, preserve opportunities both: (a) for later linkages or mergers between such sub-regional groups; and (b) for closer monetary integration, or even monetary unions, among countries where such ambitious sovereignty mergers appear politically feasible and desirable. This is the main reason for preserving the identity of the present Central American group in a broader Caribbean payments agreement. While Section III focuses on local currency credit lines in support of mutual trade only, Section IV envisages broader forms of co-operation involving foreign exchange credits, offsetting national fluctuations in monetary reserves and bolstering mutually acceptable policies of economic development,... [ABSTRACT FROM AUTHOR]

Departing from the mainstream literature on European monetary integration, we acknowledge the interdependence of economic sentiment synchronisation and business cycle co‐movements for 17 European countries and the euro area (EA). Building on national accounts and survey data, we find non‐negligible evidence that sentiment cycles are the driving force behind general economic cycle synchronization. We demonstrate that recent EA acquisitions have witnessed an intensification of cycle synchronization with the EA core after the introduction of a common currency, corroborating the beneficial effects of the Eurosystem. Our results show a certain degree of dependence on the business cycle. The synchronization of 17 examined countries vis‐à‐vis the EA is mostly of equal magnitude or even more intensive during recessions than in expansions. In other words, the common monetary policy of the European Central Bank (ECB) should be able to effectively act as a countercyclical tool when an individual economy is facing a recession. [ABSTRACT FROM AUTHOR]

The world has been struck by a mutating systemic financial crisis that is unprecedented in terms of financial losses and fiscal costs, geographic reach, and speed and synchronization. The crisis from August 2007 to date can be divided into three main phases: the financial turmoil from August 2007 to the collapse of Lehman Brothers; the global financial crisis from September 2008 until spring 2010; and the eurozone sovereign debt crisis from spring 2010 to the current period. While each phase has brought significant challenges, the current sovereign debt crisis has been the most critical stage for the eurozone. It has brought unprecedented challenges for the monetary union and triggered extraordinary adjustments in both monetary policy and institutional arrangements at the eurozone level. The purpose of this article is to outline the features of each crisis phase, to describe the actions taken by the European Central Bank (ECB) during each phase and to explain the rationale for such measures. It also discusses the need to strengthen further the economic union in order to guarantee the sustainability of the monetary union of the eurozone. In this respect, it is argued that the recent institutional adjustments made at the European Union level would have been necessary independently of the financial crisis. [ABSTRACT FROM AUTHOR]

The massive financial instability of 2007–08 was, in the main, the result of lax monetary policy. Regulation compounded this error by allowing and encouraging excessive leverage and maturity transformation by banks. Innovation did contribute to reckless credit expansion and investments, but without lax money and excessive leverage, reckless bets on asset price increases would not have been possible. Therefore, a repeat of this instability could be avoided by correcting these two policy faults. There is no need for intrusive rules constraining non-bank intermediaries and financial innovation. The main message is: keep it simple. [ABSTRACT FROM AUTHOR]

We study the impact of rotating votes in the ECB Governing Council after EMU enlargement, based on national and euro-wide Taylor rules and on a convergence assumption. We find that the rotation system yields monetary policy decisions that are close both to full centralization and to a voting rule without rotations. [ABSTRACT FROM AUTHOR]

The original article with Lars Calmfors predicted that highly coordinated or centralized bargaining would lead to wage restraint and low unemployment. Despite shortcomings, this prediction has survived scrutiny. Recent work suggests that collective bargaining should be seen as part of broader research on institutions and macroeconomic performance in growth. [ABSTRACT FROM AUTHOR]

The European Central Bank (ECB) ranks highly on our proposed central bank disclosure indicator, measuring activities of central banks to enhance the public's understanding of their policies. Nevertheless, our survey evidence suggests that private-sector economists do not consider the ECB transparent. We argue that this may be caused by the quality of the information provided by the ECB. In addition, the way intermediaries report on the ECB may influence the public's perceptions. The ECB also does not rank highly in terms of credibility; still, most ECB policy decisions were in line with financial markets' expectations. [ABSTRACT FROM AUTHOR]

Examines the theory of monetary policy when the monetary authority faces asymmetries in the countries constituting the monetary union. Background on the monetary policy regime in Europe; Overview of the two-country model and the model under asymmetric shocks; Graphical interpretation of the results; Conclusion.

Defines a currency union as an area within which a single currency circulates and acts as the dominant medium of exchange and unit of account. Monetary and fiscal policy making powers of the unions; Impact of the union on national fiscal policies of member-countries.

Examines existing proposals for a European money aimed primarily at price stability. Prerequisites of the official debate; Gradual approach for the transition to a single currency; Parallel currency approach to monetary union; Commodity basket monetary standard.

The common understanding of the history of European integration obfuscates much of the strong bonds between European integration and its pre‐history in western multilateral co‐operation This western co‐operation centred around the inter‐connected policy fields of monetary management, trade and social policies during the pre‐phase of European integration. This contribution reconstructs the trans‐Atlantic institutional framework, within which a unique multilateralism in post‐war Western Europe, could emerge. The analysis suggests new explanations for the specific design, which characterizes this European variant of post‐war multilateralism: a regionally oriented 'social market' pursued through a process of European integration. [ABSTRACT FROM AUTHOR]

The monetary dialogue between the European Parliament and the European Central Bank (ECB) is a key component for the democratic accountability of the independent central bank. We provide new evidence for the efficiency of the dialogue and present the results of a survey conducted amongst the members of the parliament's ECON (economic and monetary affairs) committee. We find that while the monetary dialogue may have had little or even a negative impact on financial markets, it plays a significant role in informing and involving members of parliament and their constituencies. Amidst an intensifying debate about the communication and transparency of the ECB, these findings shed new light on the current state of affairs of ECB accountability and its alleged need for enhancement. [ABSTRACT FROM AUTHOR]

The article focuses on the economic condition of Europe after recession. Topics mentioned include the low inflation rate in Europe, the monetary and fiscal policy developments, and the labor market in Europe. Also mentioned are the development of labor market and employment policies, the importance of economic recovery in 2014 and 2015 to the development in labor market, and the percentage of unemployment rates from 2005-2015. It also added the eurozone economies including Italy, Ireland, and Portugal and the international relations of Europe.

The sustainability of European EMU (economic and monetary union) remains an important issue in light of existing plans for enlargement. This article conducts an endogeneity analysis of output synchronization, based on panel data estimation from 1994 to 2013, for different country-groups, including core, periphery, central and eastern European countries, northern European countries and the prospective candidate countries, which are expected to adopt the euro over the coming years. The quantification of trade-related and direct spillover channels associated with monetary integration provides insight into the relative importance of direct and indirect synchronization gains arising from EMU membership. The use of amplitude and concordance measures of synchronization and a range of estimators enhances robustness. Important endogeneity implications emerge from our analysis. [ABSTRACT FROM AUTHOR]

The article focuses on the present economic conditions of the Eurozone as of 2014, along with an economic outlook for the region. Topics include eurozone's economic recovery following the financial crisis, Greece's departure from the eurozone called Grexit, election of Jean-Claude Juncker as president of the European Commission, developments in eurozone monetary policy, and European Central Bank's (ECB) policy of interest rates. Also mentioned is relation between ECB Governing Council and Single Supervisory Mechanism for the banking industry.

Does banking union exacerbate the European Union's democratic deficit? Using Scharpf's 'input' and 'output' legitimacy concepts, it is argued in this article that its design does worsen the democratic deficit. There are good reasons to limit 'input legitimacy' for politically independent institutions. 'Output legitimacy' is then even more relevant. Transparency is a key part of 'output legitimacy'. It enables actors to judge whether the regulator is acting in the public's interest and can improve their outputs. This article focuses on the banking data that the supervisors collect. Data available to the European public is evaluated and compared to America's banking union. European practices are not comparable in terms of availability or detail. An original survey of relevant officials is conducted, which results in the finding that only 11 of 28 Member States release any information on the banks they supervise. Both EU and national supervisors should provide publicly available, timely and consistent individual bank data. [ABSTRACT FROM AUTHOR]

The article discusses the global economy in 2009 and 2010, which was said to be recovering from a deep recession. Growth in emerging economies such as China and India was aided by the monetary policies of developed nations. International trade, asset and commodity prices, and inflation all rose. This is said to have reduced concerns about a potential deflationary spiral. Unemployment fell only slightly, and account imbalances remained problematic. The article assesses how worldwide trends affected the performance of the ten EU economies which remained outside the eurozone in 2010, giving an overview of key economic performance indicators.

Although central and eastern European states widely adopted central bank independence in the 1990s, many later baulked at meeting the Maastricht criteria and adopting the euro. We employ two key variables - regime and institutional discontinuity at the domestic level and the credibility of international institutions' policies - to explain these different responses to the requirements of economic and monetary union. [ABSTRACT FROM AUTHOR]

The monetary policy framework of the Eurosystem has received considerable attention in recent years: there is a well-established and rich literature on the price stability objective, as well as the two-pillar strategy of the ECB. This is less the case for the regular monetary policy preparations and the decision-making process. This article provides an insider's roadmap to the procedures to prepare monetary policy decisions by the Governing Council of the ECB. The architecture of the Eurosystem permits the processing and analysis of a vast amount of national and aggregate economic, financial and monetary data and assists the Governing Council in taking monetary policy decisions – and this each month. Our aim is to describe the role of a variety of committees and sub-committees that prepare and support the monetary policy decision-making process. A federal organization is at the heart of this process. At the top of the pyramid of information there is a two-tiered committee structure with the Executive Board taking the lead in bringing together most of the economic, financial and monetary analyses, and the Governing Council utilizing that information, for its monthly economic and monetary analyses. [ABSTRACT FROM AUTHOR]

The global financial crisis of 2007–08 produced a sudden change in the economic policy of the United Kingdom (UK). Prior to the crisis, the government preached the gospel of price stability, fiscal prudence and light-touch financial regulation. In the wake of the crisis, the government countenanced unconventional monetary policies, a surge in public-sector borrowing and the need for a rethink of financial supervision. This article seeks to understand the significance of these changes using Peter Hall's theory of policy paradigms. Its central argument is that, contrary to appearances, the UK has not yet experienced a fundamental reordering of the instruments, institutions and aims of economic policy. Third-order change cannot be ruled out as the crisis unfolds but the economic ideas underpinning UK economic policy have, for better or worse, demonstrated remarkable resilience thus far. [ABSTRACT FROM AUTHOR]

Strong symmetry of shocks allows for the formation of a monetary union with low costs due to losing monetary sovereignty. I employ vector autoregression to identify structural shocks and study their symmetry through time. I find that the underlying structural shocks have not changed significantly and remain rather asymmetric, particularly demand shocks. [ABSTRACT FROM AUTHOR]

This article explores the evolution of the European Union's Broad Economic Policy Guidelines (BEPGs) since their introduction in 1993. It argues that the BEPGs have demonstrated value-added as an overarching instrument of policy co-ordination and as a catalyst for co-operation between European and national policy-makers. Notwithstanding this, the effectiveness of the BEPGs appears to have been hindered by the progressive accumulation of guidelines and by the failure of peer pressure to bite as a sanction mechanism. The re-launch of the Lisbon Strategy in March 2005 simplified and streamlined the BEPGs, embedding them within a new set of Integrated Guidelines for Growth and Jobs. Key issues surrounding the future of the BEPGs concern their potential as a trigger for ‘home grown’ peer pressure, their attention to euro area specific issues and the involvement of the European Parliament in multilateral surveillance. [ABSTRACT FROM AUTHOR]

How fast should the new Member States of the European Union (NMS) relinquish their domestic monetary and exchange rate autonomy? While the Maastricht convergence criteria are attracting significant attention (particularly the inflation and deficit criteria), we think the debate should also examine the status of their economic structures and the progress of integration within the EU. Diverse aspects of the monetary integration of the NMS into the euro area are examined. We find less structural convergence is associated with less income convergence. The exchange rate regimes have a bearing on the speed of real convergence: for some NMS, and for some more time, exchange rate flexibility may still serve as a useful shock absorber. [ABSTRACT FROM AUTHOR]

This study analyses the allocation of power in the Governing Council of the European Central Bank (ECB) as it enlarges to accommodate new members of the economic and monetary union. For this purpose, two classical power indices that have their origin in solutions to co-operative games are applied. First, an assessment is made of the effects of enlargement on the voting power of different subgroups of the Governing Council that arise in the wake of the continuous accession process. Second, a systematic comparison is carried out to the status quo rule (‘one member, one vote’) with respect to the voting power of the ECB Executive Board and to the representativeness of European monetary policy, along with the potential for its renationalization. [ABSTRACT FROM AUTHOR]

This article investigates why economic governance of EMU remains a matter for disagreement, revisiting in particular the Franco—German debate about the appropriate architecture. Is it due to divergent policy priorities within the same analytical framework? To different economic models? Or to non-economic considerations, such as the link with political union? [ABSTRACT FROM AUTHOR]

The belief that the European Central Bank (ECB) follows the US Federal Reserve (the Fed) in setting its policy is so entrenched with market participants and commentators that the search for empirical support would seem to be a trivial task. However, this is not the case. We find that the ECB is indeed often influenced by the Fed, but the reverse is true at least as often if one considers longer sample periods. There is empirically little support for the proposition that there has for a long time been a systematic asymmetric leader-follower relationship between the ECB and the Fed. Only after September 2001 is there more evidence of such an asymmetry. There is a clear-cut structural break between the period pre-economic and monetary union (EMU) and EMU itself in terms of the relationship between short-term interest rates on both sides of the Atlantic. [ABSTRACT FROM AUTHOR]

In this article, we analyse the conduct of optimal monetary policy for the new euro area. The aggregate euro area economy is modelled to have relatively sluggish adjustment properties and a private sector with mainly backward-looking expectations. In this economy, we assume that the central bank searches for its best-performing monetary policy rule, e.g. for the optimal weight to give to inflation stabilization compared to that of output and for the optimal degree of forward-looking in the planning horizon. We first find that the optimal degree of gradualism in interest rate-setting needs only be relatively mild and that the central bank should incorporate new information quickly into policy-making. Second, there is substantial gain from implementing and communicating quite forward-looking policies. The optimal forecast horizon for inflation ranges around six quarters. In contrast to deliberately simple rule-based policy recommendations, fully optimal policy is a complicated response to many different economic indicators. With regard to this we find, third, that optimal policy should be based on a broad information set, even if the resulting policy framework is hard to communicate to the outside world. Thus, the article contributes to the debate on optimal monetary policy for the euro area, as well as to the conduct of monetary policy in face of substantial persistence in the transmission mechanism. [ABSTRACT FROM AUTHOR]

The aim of this article is to uncover the aggregate monetary policy preferences in the euro area. This is pursued under the assumption of optimizing policy behaviour subject to a simple model of the macroeconomic structure, following a procedure proposed recently in the literature in which GMM estimation stems from the optimal control solution to the optimization problem. Instead of waiting for more quarterly data of ECB policy-making, the sample goes as far back as possible into the pre-EMU years. Through a combined analysis of facts, data and literature on European integration, 1995 is identified as the start date of a euro area notional policy regime, sustained later by the ECB. The policy preferences are estimated as a loss function with strict inflation targeting at 1.6 per cent and interest-rate smoothing, in the period 1995–2002. [ABSTRACT FROM AUTHOR]

In monetary policy strategies geared towards maintaining price stability, conditional and unconditional forecasts of inflation and output play an important role. In this article we illustrate how modern sticky-price dynamic stochastic general equilibrium (DSGE) models, estimated using Bayesian techniques, can become an additional useful tool in the forecasting kit of central banks. First, we show that the forecasting performance of such models compares well with a-theoretical vector autoregressions. Moreover, we illustrate how the posterior distribution of the model can be used to calculate the complete distribution of the forecast, as well as various inflation risk measures that have been proposed in the literature. Finally, the structural nature of the model allows computing forecasts conditional on a policy path. It also allows examination of the structural sources of the forecast errors and their implications for monetary policy. Using those tools, we analyse macroeconomic developments in the euro area since the start of EMU. [ABSTRACT FROM AUTHOR]

An early criticism of the Stability and Growth Pact (SGP) has pointed to its asymmetric nature and the weak mechanisms to prevent politically-motivated fiscal policies: its constraints would bite in downswings but not in upswings, especially if, in the latter, the electoral cycle increases the temptation to run expansionary policies. We find that the experience of the initial years of EMU lends support to this criticism. Overall, unlike the experience in the run-up to EMU, fiscal policies had an expansionary bias, and a‘genuine’ discretionary boost took place in correspondence to political elections. Both sign and composition of such discretionary changes are in line with the predictions of the recent literature on electoral budget cycles. Closer fiscal surveillance may help detect such behaviour early on, but it is unlikely to curb the incentives to run politically-motivated fiscal policies when elections approach. [ABSTRACT FROM AUTHOR]

In this article we analyse how the enlargement of a monetary union may affect the design of the common monetary policy when the latter transmits asymmetrically between the member countries. We find that the use of national information about inflation and unemployment in the design of the common monetary policy allows for tackling the heterogeneity induced by this asymmetry. This implies that if enlargement contributes to augmenting the transmission asymmetry of monetary policy in EMU, it will raise the need to take into account information about national economies in the formulation of optimal monetary policies in the monetary union. Furthermore, the choice for a new EU Member State to enter EMU will also depend on the monetary strategy implemented by the European Central Bank and, in particular, whether the latter would take the asymmetries in the transmission of monetary policy actions into account. [ABSTRACT FROM AUTHOR]

This article provides an analytical discussion of the adjustment to EU accession for an economy under alternative assumptions about monetary policy rules. The post-accession phase is characterized by rapid capital inflows and real exchange rate appreciation. If accession is combined with membership of the euro area and a pegged exchange rate, then the post-accession period exhibits excessive foreign borrowing, high wage inflation, an excessive stock market boom, and much too rapid growth in the non-traded sector at the expense of the exportable goods sector. Alternative monetary policies can be used to eliminate the inefficiencies of the post-accession adjustment, but some bring real costs in terms of lower growth and unemployment. We find that the best policy is one of flexible inflation targeting with some weight on exchange rate stability. In the absence of exchange rate adjustment, fiscal policy could be used, but this requires complicated time-varying expenditure taxes. While the analytical discussion emphasizes the benefits of exchange rate adjustment, a later section of the article explores some more recent arguments regarding non-traditional costs of exchange rate volatility. [ABSTRACT FROM AUTHOR]

Provides information on the developments in the economies of 15 European Union Member States in 2002 and their implications for European integration. Increase in the growth of gross domestic product of most member countries; Economic implications of cuts in short-term interest rates; Changes in the fiscal and monetary policies.

Abstract Using stochastic simulations, this article analyses the probability distribution of a country's deficit ratio under fixed exchange rates and a variety of monetary and fiscal policy rules. The purpose is to show how the probability of an ‘excessive deficit’, defined by Europe's Stability Pact as a deficit to GDP ratio above 3 per cent, varies with different deficit targets and policy rules. Using a macro model, we find that when subject to historically consistent shocks, these fiscal ratios typically have a wide distribution, with fat tails and significantly longer tails on the upper side. That means fiscal targets may have to be country-specific and conservative, and that fiscal policy has to be forward-looking to keep the probability of excessive deficits below acceptable limits. [ABSTRACT FROM AUTHOR]

Despite the economic and political success of its launch, the challenges ahead for the euro are formidable. This article analyses some of these challenges, focusing particularly on the monetary policy strategy of the European Central Bank (ECB) and on the implications of enlargement of the monetary union to up to 27 Member States. The monetary policy strategy and inflation target of the ECB are criticized for being unrealistic and possibly damaging to the ECB’s credibility. It is shown that unless the mechanisms for taking interest rate decisions are rethought, there are risks that the wrong decisions will be taken after enlargement. [ABSTRACT FROM AUTHOR]

This article explores the sources of the German govermnent’s position on European monetary integration since the first attempt at monetary union. I argue that German policy on European monetary integration was, until after EMU, driven by German foreign policy elites’ perception that integration could be used to achieve their primary geo-political goal, embedding Germany in European institutions to dismantle the security dilemma with its European neighbours, particularly with France. After the signing of the Maastricht Treaty, this situation was reversed, as domestic economic interests and state financial authorities have taken the lead in shaping Germany’s policy on European monetary integration, with foreign policy elites playing a secondary role. Thus German policy has come to resemble more the policies of other European monetary union member states, in that domestic economic concerns have taken precedence over geo-political interests in the making of policy on European monetary integration. [ABSTRACT FROM AUTHOR]

The performance of the European Monetary System is still being debated. On the subject of exchange rate characteristics it has been claimed that evidence from looking at the statistical properties of the exchange rate distribution indicates an increased risk for agents. Others argue that the apparent success of the EMS is illusory, as it has not performed better than other currencies over the same period. We analyse these propositions by searching for trends in risk of EMS exchange rates and comparing them to outside benchmarks. We find properties indicating decreasing risk and these results also hold when structural breaks are considered. Moreover, this decline seems to be faster than for world benchmarks. [ABSTRACT FROM AUTHOR]

Presents a revised article of the `Journal of Common Market Studies' Annual Lecture delivered on October 10, 2000 at the Guildhall in the City of London, England on the successful launching of the Euro as the monetary currency of the European Union member countries.

Analyzes the effect of the move to the Economic and Monetary Union (EMU) on the procedures through which co-operation between authorities in charge of budgetary and monetary policy takes place. Examination of the way in which authorities in charge of budgetary and monetary policy conducted their dialogue prior to EMU; Discussion on policy-coordination in the first year of EMU; Conclusions and proposals.

Presents a response to the article entitled `Alice in Euroland,' which was published in the 1999 issue of the `Journal of Common Market Studies' which deals with the accountability and transparency of the European Union monetary system. Comment on the proposal to enhance further the accountability and transparency of the European Central Bank.

Presents information on a study which focused on the critical foundation for European monetary integration which is the neoliberal economic policy convergence that occurred many years back in European history. Ideas and policy concensus in monetary co-operation; Information on the macroecpnomic policy in Europe.

Proposes an alternative explanation of the existence and longevity of the European Monetary System (EMS). Need to understand monetary integration within the context of the mode of economic integration chose by the original European Community (EC) members; Contradiction between fluctuation internal exchange rates and the EC's Common Agricultural Policy.

Explores the different strategies for monetary integration in the European Union countries, higlighting the experience of the European Monetary System (EMS). Criteria for assessing the strategies for monetary integration; Features of the EMS plan; Prospects for further development of the EMS.

Assesses the operation of the European Monetary System (EMS) from March 1979 to 1984. Factors contributing to success of the EMS; Aims and scope of EMS; Implications of the international monetary crisis of 1971; Large exchange rate changes resulting from divergent monetary policies.