Advanced Search
MyIDEAS: Login to save this article or follow this journal

Experiences of European crisis management: the reform of economic policy coordination

Contents:

Author Info

  • Gergely Kiss

    ()
    (Magyar Nemzeti Bank (central bank of Hungary))

Registered author(s):

    Abstract

    This article is intended to present the new, (re)forming elements of economic policy coordination, an instrument playing a central role in the EU. One important lesson drawn from the crisis is that in order for the EU to become a stable, dynamically growing economy – in addition to its internal market (in particular, the free movement of capital) and a single monetary policy – there is a need for efficient coordination, which should also be credible for the markets. Economic policy coordination – the alignment of national fiscal policies to one another and, for euro area Member States, to the common monetary policy – is a key issue, and the intention to reform it is closely related to the crisis management of the past two years. The proposals presented thus far indicate that EU policy makers are firmly committed to setting up economic policy coordination mechanisms which are far more efficient than those already in place. Accordingly, they will rigorously assess both fiscal and real economic imbalances, and after the imbalances have been identified, they will readily enforce corrective mechanisms, including sanctions more severe than those already in place. Rules governing crisis management will certainly be clearer; however, in order to minimise moral hazard, the common European rescue package will continue to have a hefty price tag. It is a warning sign, however, that despite firm policy intentions, markets remain rather sceptical about the reform of the fiscal framework and the ability to guarantee the sustainability of fiscal policies, as indicated by the sovereign credit risk premia, which by September had risen to the levels observed in May.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://english.mnb.hu/Root/Dokumentumtar/ENMNB/Kiadvanyok/mnben_mnbszemle/mnben_mnb_bulletin_october_2010/kiss_EN.pdf
    Download Restriction: no

    Bibliographic Info

    Article provided by Magyar Nemzeti Bank (the central bank of Hungary) in its journal MNB Bulletin.

    Volume (Year): 5 (2010)
    Issue (Month): 3 (October)
    Pages: 40-46

    as in new window
    Handle: RePEc:mnb:bullet:v:5:y:2010:i:3:p:40-46

    Contact details of provider:
    Web page: http://www.mnb.hu/
    More information through EDIRC

    Related research

    Keywords: EU institutions; policy coordination; crisis management;

    Find related papers by JEL classification:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:mnb:bullet:v:5:y:2010:i:3:p:40-46. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maja Bajcsy).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.