This report surveys the economic performance of the euro area and gives recommendations about six policy challenges of major importance for the future of EMU.

Alan Ahearne and Jürgen von Hagen examine one of the most alarming global economic developments in recent years- the evolution of global current account imbalances and its implications for European policy.

The euro area faces a double challenge: debt overhang and the need for price adjustment. This paper reviews the debt challenges in the household and corporate sectors and maps out some policy options. In particular, we document the increase in private debt prior to the crisis and consider how...

Alan Ahearne and Jean Pisani-Ferry explore the implications of economic divergence in the euro area for policy makers, as well as the discipline required to be part of the single currency. From this analysis they derive policy recommendations, both for the policies and monitoring of existing...