Economic Policy in Europe

The Economic and Monetary Union requires stronger co-operation in matters of economic policy than this has been the case in the past. Priority is given to the goal to guarantee an adequate co-ordination of the various areas of politics by a dialogue between the protagonists of the economic policy in order to create the prerequisites for non-inflationary economic growth and employment in this way.

Areas in which co-ordination is necessary  

The member states as well as particularly the participants in the common currency take a special responsibility for an adequate and economically balanced co-ordination of their fiscal policies among each other as well as towards the monetary policy of the European Central Bank. Likewise, the member states are responsible to support macro policy, i.e. the interplay between monetary, fiscal and wage policy by an active structural policy in the area of the job, goods, service and financial markets. The social partners, who have substantial influence on the national economic development due to their responsibility for the wage policy, are therefore increasingly tied into these co-ordination efforts. A third area, ultimately, is the outer representation of the common currency where it is all about guaranteeing a uniform and effective appearance at an international level.

Progress of the last years

For this reason, the participating states have considerably intensified their co-operation regarding the common currency in political and economic questions during the last years. The most visible example is the Stability and Growth Pact which has fundamentally contributed to the consolidation of the public finances in all member states. At the same time, qualitative matters of the budget policy were increasingly included in the discussion. In this context, topics like the budgetary effects of the aging population, the significance of public investments for economic growth and employment, or the incentive mechanisms of the fiscal and social systems with regard to the support of labour supply as well as the readiness for education, constitute the main issues.

Aside from a stable macroeconomic framework, from the point of view of the Austrian ministry of finance, efficient and competitive markets are another prerequisite to release the growth potential of the common currency as well as the new technologies. Therefore, another target of tight co-ordination is to further deepen the integration of the individual markets and to remove still existing obstacles, e.g. on the financial and on the capital markets.

 

• Trade Policy
• Current results of the ECOFIN meetings
• Lisbon Strategy
• Stability and Growth Pact
• Broad Economic Guidelines

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