Abstract

This academic research paper outlines the legal framework of economic policy coordination within the EMU and evaluates the different coordination methods in place through the monetary, fiscal and supply-side policies. The introduction presents the general EMU economic policy framework and introduces the main methodological issues for economic policy coordination which are developed throughout the paper: the centralised/decentralised approaches, the hard/soft law systems, the Community/intergovernmental methods and the Open Method of coordination. The legal framework of each main EMU macroeconomic policy is then analysed in a specific chapter and limits are pointed out in each case. Eventually, each chapter presents ideas and/or recommendations to improve the existing economic policy legal framework. Chapter 1 focuses on the EMU monetary policy and its legal system, made of the European System of Central Bank and the European Central Bank. The centralized EMU monetary policy is analysed and it is argued that further coordination is needed with the other economic policies; especially with the exchange rate policy. Chapter 2 deals with the EMU fiscal policy and is divided into two main sections: the Broad Economic Policy Guidelines and the Stability and Growth Pact. The BEPGs section insists on the intergovernmental and soft law aspect of the BEPGs and their limits for the conduct of EMU fiscal policies; whereas the SGP section emphasises the multilateral surveillance system of the SGP and more particularly the Excessive Deficit procedure and its hard law aspect for coordinating the national budgetary policies. Chapter 3 focuses on the supply-side policies and the recent Lisbon strategy for employment and reforms, and particularly emphasises the Open Method of Coordination chosen at the Lisbon Council in March 2000. The paper finally suggests that despite all the different coordination processes already in place, the EMU legal framework for economic policy coordination still needs to be improved; and that a suitable method for economic policy coordination in the EMU still needs to be designed or identified to deliver sustainable economic policy coordination in the EMU.