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European Monetary Union and Macroeconomic Policy in Southern Europe: the Case for Positive Integration

Published online by Cambridge University Press:  28 November 2008

Heather D. Gibson  and
Euclid Tsakalotos
Heather D. Gibson
Affiliation:
Economics, University of Kent
Euclid Tsakalotos
Affiliation:
Economics, University of Kent
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Abstract

This paper discusses the prospects of Greece, Portugal and Spain completing stage 1 of the Delors plan. Much of the academic literature on the removal of capital controls seeks to extend the experience of the ERM countries in the 1980s. We argue that its applicability for southern Europe is not straightforward, because these countries have not had the same experience of operating the ‘old’ ERM with capital controls, and examine the implications for these countries of removing capital controls for macroeconomic, and especially, fiscal policy. Intermediate institutional arrangements may be necessary and we consider how EC-wide measures may help these countries in this transitional phase. For the next phase of European integration, the focus of the EC should be on developing appropriate public institutions at the European level to promote positive integration.

Type
Articles
Information
Journal of Public Policy , Volume 11 , Issue 3 , July 1991 , pp. 249 - 273
Copyright
Copyright © Cambridge University Press 1991

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