IMF Staff Country Reports

Euro Area Policies: Staff Report

Publication Date:

August 3, 2005

Electronic Access:

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Summary:

This paper focuses on euro area policies. The monetary policy stance remains appropriate for now. Fiscal policies are falling well short of consolidation requirements, and the area remains insufficiently prepared for the looming demographic shock. Past fiscal policy failures, notably insufficient adjustment during economic upswings, have strained the Stability and Growth Pact (SGP) and EMU’s fiscal framework. IMF staff has welcomed certain elements of flexibility in the SGP reforms while regretting the vagueness and open-endedness of others. Center-led structural reform programs have struggled to deliver.

Series:

Country Report No. 2005/265

Subject:

Employment Inflation Labor Macrostructural analysis Oil prices Price stabilization Prices Structural reforms