Development and Finance from issue 2010/2

Stergios Babanasis

Ten Years of the Euro: Achievements and Problems

- Abstract -

JEL F-33

There have been disputes about Economic and Monetary Union since the very beginning, with many arguments both for and against. Many level criticism at the convergence criteria, maintaining that they constitute a rigid monetary framework which lacks social criteria. The dispute and experience over the last ten years provide an opportunity to put together some recommendations with a view to tackling the problems. One such recommendation relates to modifying the Stability and Growth Pact and the convergence criteria. The second important recommendation relates to the issuance of Eurobonds, which is even more topical given the current crisis. The third recommendation relates to existing institutions of the European Union: The European Investment Bank should provide loans under better terms and conditions to Member States in debt. The fourth proposal is essentially the creation of a new Community fund to help struggling Member States in the euro area. Finally, continuing to develop the European Economic and Political Union and harmonising it with the Monetary Union can make a long-term contribution to resolving the mentioned problems.

Stergios Babanasis, Professor Emeritus, DSc (Hungarian Academy of Sciences), President of the Mediterranean Research Institute

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