| Abstract: | In this paper we discuss the emergence of the new European macroeconomicstructure within EMU. We focus on three important elements:the wage-fixing authorities in each country, the fiscal authoritiesin each country, and the single European Central Bank (ECB).We identify serious problems which might arise in coordinatingboth the wage-setters and the fiscal authorities, and arguethat these problems could be exacerbated if the ECB conductsmonetary policy inappropriately. In the light of this we providerecommendations for the conduct of monetary policy by the ECB.The paper also briefly discusses financial stability issuesand the interaction between the countries in EMU and the restof the world. |
