Prevention and Correction of Macroeconomic Imbalances: the Excessive Imbalances Procedure
Macroeconomic imbalances can lead to economic crises. This is especially true in a monetary union due to the restrictions it imposes on the tools available to economic policymakers. The years leading up to the outbreak of the global economic crisis were characterized by divergent macroeconomic developments within the euro area, which meant that the impact of the crisis varied from Member State to Member State and that, subsequently, unexpected challenges have arisen for the single monetary policy and coordinated fiscal and economic policy. In order to prevent such developments in future, a procedure for preventing and correcting macroeconomic imbalances, analogous to the Stability and Growth Pact, was created within the framework of the European semester. The preventive arm of the procedure is designed to detect and analyze potential macroeconomic problems. If the procedure flags up “excessive” imbalances for a Member State, the corrective arm will come into effect, under which the relevant Member States will be required to submit plans for corrective measures. If Member States then fail to comply with the recommended corrective actions, sanctions may be imposed. The new procedure constitutes a considerable boost to economic policy coordination within the EU and the euro area. Nonetheless, it has yet to prove itself in practice.
Volume (Year): (2011)
Issue (Month): 4 ()
|Contact details of provider:|| Postal: P.O. Box 61, A-1011 Vienna, Austria|
Phone: +43/1/404 20 7405
Fax: +43/1/404 20 7499
Web page: http://www.oenb.at
More information through EDIRC
|Order Information:|| Postal: Oesterreichische Nationalbank, Documentation Management and Communications Services, Otto-Wagner Platz 3, A-1090 Vienna, Austria|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Christian Ragacs & Beate Resch & Klaus Vondra, 2011. "Austria’s Manufacturing Competitiveness," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 3, pages 35-61.
When requesting a correction, please mention this item's handle: RePEc:onb:oenbmp:y:2011:i:4:b:6. 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: (Claudia Kwapil)
If references are entirely missing, you can add them using this form.