Macroeconomic Policy in the EMU

Macroconomic policy and policy coordination in EMU remain controversial issues. This is not surprising in light of the fundamental policy asymmetry built into EMU: power over monetary policy is delegated to the ECB, thereby centralised in the hands of a highly independent supranational institution. Other economic policies, by contrast, remain a matter for national governments, though subject to the rules of the internal market and the SGP. As noted above, the euro is a ‘currency without a state’ and as such lacks historical precedent. This adds to the pertinence of the basic questions: is this asymmetric policy configuration problematic, perhaps even unsustainable, or is it a matter of little concern, perhaps even desirable? What is the appropriate relation between economic policy decisions of member states and of the euro area as a whole? How should we define the aims and boundaries of policy autonomy, policy discipline and policy coordination?