Introduction

The European Central Bank (ECB) was established in June 1998, European Monetary Union (EMU) came into operation in January 1999, Greece joined the 11 original members of EMU in January 2001 and euro notes and coin were introduced in January 2002. While all of these operations have arguably been carried out with considerable success, the economic performance of the eurozone has been less than outstanding and attitudes towards the ECB and EMU, especially in countries outside the eurozone, have become less favourable. In particular, the eurozone is generally considered to be experiencing poor economic growth: there was a strong recovery in 1999–2000, but the slowdown of 2001–03 was succeeded by only a weak recovery in 2004–05 (though it seems that a stronger pickup in growth is coming through now). At the same time, both the operation of monetary policy and the coordination (or lack of it) between monetary and fiscal policy have been subjected to a variety of criticisms. This book is designed to examine economic developments in the eurozone since 1999 and to assess the criticisms commonly made of the ECB and the EMU project. It brings together leading European and American macroeconomists to discuss issues in monetary policy, fiscal policy and structural reform, and a number of other questions which are important for the evolution of the eurozone.