A perceived need to increase nominal wage flexibility as a substitute for domestic monetary policy and a tendency to less wage moderation are likelyto promote bargaining co-ordination and social pacts in the EMU. But such co-ordination is not likely to be sustainable in the long run, as it...

An important issue for the EMU countries is to what extent fiscal policy can be used to stabilise the domestic economy in the case of asymmetric macroeconomic shocks. The paper reviews possible reforms of national fiscal policy institutions in order to promote efficient fiscal stabilisation...