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Rethinking EMU Institutions

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Author Info
Marco Lossani (Catholic University of Milan)
Piergiovanna Natale () (Department of Economics, University of Milan-Bicocca and Catholic University of Milan)
Patrizio Tirelli () (Department of Economics, University of Milan-Bicocca and University of Glasgow)

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Abstract

Building on widespread criticisms of current EMU institutional arrangements, we sketch a reform proposal for EMU macroeconomic institutions. We advocate the adoption of targets for both monetary and fiscal policies, to be integrated by a system of checks and balances. As for fiscal policy, expenditures, taxation and deficit targets will strengthen the governments commitment and, at the same time, facilitate "wellbehaved" stabilisation policies. Turning to monetary policy, inflation targeting, alongside with the assignment of ex-post assessing powers to the European Parliament and an internal reform of the ECB, will limit undue nationalistic influences within the ECB governing bodies.

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File URL: http://dipeco.economia.unimib.it/repec/pdf/mibwpaper40.pdf
File Format: application/pdf
File Function: First version, 2001
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Publisher Info
Paper provided by University of Milano-Bicocca, Department of Economics in its series Working Papers with number 40.

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Length: 31 pages
Date of creation: Sep 2001
Date of revision: Nov 2001
Handle: RePEc:mib:wpaper:40

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