Four Essays and a Funeral: Budgetary Arithmetic under the Maastricht Treaty

Andrew Hughes Hallett and Peter McAdam ()

No 1505, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper analyses four popular themes in the debate about the transition to monetary union: (a) fiscal discipline creating gains in credibility; (b) there being perceptible risk of a bail out for the highly indebted countries; (c) budgets being successfully cut to the required 3% limit in conditions of low growth and low inflation; and (d) the convergence criteria actually being mutually consistent. The usual accounting identities show the first two effects are likely to be small or non-existent, whereas the second two are unlikely to be satisfied.

Keywords: Convergence Criteria; Credibility; Debt and Deficit Ratios (search for similar items in EconPapers)
JEL-codes: E63 F15 H63 (search for similar items in EconPapers)
Date: 1996-12
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