The Assessment: Macroeconomic policy after EMU

In this paper we discuss the emergence of the new European macroeconomic st ructure within EMU. We focus on three important elements: the wage-fixing a uthorities in each country the fiscal authorities in each country, and the single European Central Bank (ECB). We identify serious problems which migh t arise in coordinating both the wage-setters and the fiscal authorities, a nd argue that these problems could be exacerbated if the ECB conducts monet ary policy inappropriately In the light of this we provide recommendations for the conduct of monetary policy by the ECB. The paper also briefly discu sses financial stability issues and the interaction between the countries i n EMU and the rest of the world.