IDEAS home Printed from https://ideas.repec.org/a/eee/jpolmo/v27y2005i4p421-426.html
   My bibliography  Save this article

The euro and the stability pact

Author

Listed:
  • Feldstein, Martin

Abstract

This paper begins by discussing the inherent conflict between the simultaneous existence of a single currency for the countries of the European Economic and Monetary Union (EMU) and the independent fiscal policies of those countries. The Stability and Growth Pact was an attempt to reconcile that conflict. I describe how EMU governments have chosen to ignore the Stability Pact's constraint on budget deficits and how they sought to undermine it by changing the rules themselves. The final part of the paper describes the actual resolution of the issue by the agreement reached at the end of March 2005 by the European Council. The new policy effectively abandons the Stability Pact and leaves the way open to much larger sustained deficits.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Feldstein, Martin, 2005. "The euro and the stability pact," Journal of Policy Modeling, Elsevier, vol. 27(4), pages 421-426, June.
  • Handle: RePEc:eee:jpolmo:v:27:y:2005:i:4:p:421-426
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0161-8938(05)00041-4
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Lessons from the crisis
      by Alberto Bagnai in Goofynomics on 2013-12-28 04:36:00
    2. Lezioni dalla crisi: perché il Parlamento dovrebbe sfiduciare la Commissione
      by Alberto Bagnai in Goofynomics on 2013-12-29 00:32:00
    3. Audizione informale alla Commissione Finanze: il mio discorso di fine anno
      by Alberto Bagnai in Goofynomics on 2014-01-01 01:29:00
    4. Alberto vs. Alberto: la moralità di Maastricht...
      by Alberto Bagnai in Goofynomics on 2014-04-30 14:17:00

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Vural Fuat Savas, 2013. "The Euro is a Dream," The Journal of European Theoretical and Applied Studies, The Center for European Studies at Kirklareli University - Turkey, vol. 1(1), pages 113-118.
    2. Paolo Manasse, 2005. "Deficit Limits, Budget Rules, and Fiscal Policy," IMF Working Papers 05/120, International Monetary Fund.
    3. Győrffy, Dóra, 2008. "Költségvetési kiigazítás és növekedés az Európai Unióban. Tanulságok Magyarország számára
      [Budget adjustment and growth in the European Union lessons for Hungary]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(11), pages 962-986.
    4. Huber, Bernd & Runkel, Marco, 2008. "Interregional redistribution and budget institutions under asymmetric information," Journal of Public Economics, Elsevier, vol. 92(12), pages 2350-2361, December.
    5. Vyprachticka, Terezie, 2011. "Could the Stability and Growth Pact be Substituted by the Financial Markets?," European Integration online Papers (EIoP), European Community Studies Association Austria (ECSA-A), vol. 15, September.
    6. Ferré, Montserrat, 2012. "The effects of uncertainty about countries’ compliance with the Stability and Growth Pact," Journal of Policy Modeling, Elsevier, vol. 34(5), pages 660-674.
    7. repec:eee:ecmode:v:64:y:2017:i:c:p:524-538 is not listed on IDEAS
    8. Frankel, Jeffrey, 2015. "The euro crisis: Where to from here?," Journal of Policy Modeling, Elsevier, vol. 37(3), pages 428-444.
    9. Sterner, Thomas & Muller, Adrian, 2006. "Output and Abatement Effects of Allocation Readjustment in Permit Trade," Discussion Papers dp-06-49, Resources For the Future.
    10. Nicolas Afflatet, 2017. "Deficit Policy within the Framework of the Stability and Growth Pact: An Empirical Analysis," Applied Economics and Finance, Redfame publishing, vol. 4(2), pages 76-86, March.
    11. Roberto Golinelli & Sandro Momigliano, 2006. "Real-time determinants of fiscal policies in the euro area: Fiscal rules, cyclical conditions and elections," Temi di discussione (Economic working papers) 609, Bank of Italy, Economic Research and International Relations Area.
    12. Landon, Stuart & Smith, Constance E., 2007. "Government debt spillovers in a monetary union," The North American Journal of Economics and Finance, Elsevier, vol. 18(2), pages 135-154, August.
    13. Martin Larch & João Nogueira Martins, 2007. "Fiscal indicators - Proceedings of the the Directorate-General for Economic and Financial Affairs Workshop held on 22 September 2006 in Brussels," European Economy - Economic Papers 2008 - 2015 297, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    14. Dietrichson, Jens & Ellegård, Lina Maria, 2011. "Institutions promoting budgetary discipline: evidence from Swedish municipalities," Working Papers 2011:8, Lund University, Department of Economics, revised 05 Aug 2014.
    15. Drazen Derado, 2009. "Financial Integration and Financial Crisis: Croatia Approaching The EMU," Financial Theory and Practice, Institute of Public Finance, vol. 33(3), pages 299-328.
    16. Kocenda, Evzen & Kutan, Ali M. & Yigit, Taner M., 2008. "Fiscal convergence in the European Union," The North American Journal of Economics and Finance, Elsevier, vol. 19(3), pages 319-330, December.
    17. Alberto Bagnai, 2014. "Un external compact per rilanciare l'Europa," a/ Working Papers Series 1401, Italian Association for the Study of Economic Asymmetries, Rome (Italy).
    18. Golinelli, Roberto & Momigliano, Sandro, 2006. "Real-time determinants of fiscal policies in the euro area," Journal of Policy Modeling, Elsevier, vol. 28(9), pages 943-964, December.
    19. Feldstein, Martin, 2013. "Coordination in the European Union," Journal of Policy Modeling, Elsevier, vol. 35(3), pages 434-439.
    20. Richard Morris & Hedwig Ongena & Ludger Schuknecht, 2006. "The reform and implementation of the Stability and Growth Pact," Occasional Paper Series 47, European Central Bank.
    21. Bonatti, Luigi & Cristini, Annalisa, 2008. "Breaking the Stability Pact: Was it predictable?," Journal of Policy Modeling, Elsevier, vol. 30(5), pages 793-810.
    22. Dermot Hodson, 2010. "The EU Economy: The Euro Area in 2009," Journal of Common Market Studies, Wiley Blackwell, vol. 48(s1), pages 225-242, September.

    More about this item

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jpolmo:v:27:y:2005:i:4:p:421-426. 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: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/inca/505735 .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.