EconPapers    
Economics at your fingertips  
 

The Stability (and Growth) Pact and Monetary Policy

Jean-Paul Fitoussi

Working Papers from HAL

Abstract: The ECB has a very clear idea of what European governments should do in the name of 'sound' economic management: balance the budget, reduce the role of the state in the economy by cutting public expenditures; increase the flexibility of labour markets by shrinking the welfare state (see for example the ECB's Monthly Bulletin April 2002), and increase competition in both product and labour markets. Structural reforms mean, in particular, reducing employment protection and the generosity of the system of unemployment benefits. It is expected that such a comprehensive policy framework will lead to an increase in work's incentives (lower taxes allowed by the decrease in public expenditure, and lower unemployment benefits), higher growth and lower inflation pressures (through the increase in the intensity of competition). This conception of the policy mix in a broad sense is fully mainstream, which is also fully normal, as nobody would expect that a central bank hold explicitly an heterodox position. It is thus utterly normal that the ECB take an active role in the budgetary debate, especially if this debate leans towards a possible reform of the SGP, which may be interpreted by the Bank as a reduction in the degree of cooperation from National States. The Stability and Growth Pact has indeed been designed also as an instrument to enforce the cooperation of European governments towards the aim of the ECB, namely price stability (...).

Date: 2002-11
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-00972691
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published in 2002

Downloads: (external link)
https://sciencespo.hal.science/hal-00972691/document (application/pdf)

Related works:
Working Paper: The Stability (and Growth) Pact and Monetary Policy (2002) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-00972691

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD (hal@ccsd.cnrs.fr).

 
Page updated 2025-03-19
Handle: RePEc:hal:wpaper:hal-00972691