This paper provides an analysis of the controversial issue of fiscal coordination in the future monetary integrated Europe, from both a theoretical and a policy point of view. It is argued that fiscal coordination is necessary, in particular if governments care about deficits. The pragmatic solution when the economic structure of the European Union is not well known consists in assessing upper and lower bounds for deficits. The model emphasizes the positive role of the Stability and Growth Pact.
FOURÇANS, A. and VRANCEANU, R. (1998). Labor Market Institutions and Social Welfare in Transitional Economies. In: Economic Transformation in Emerging Countries. 1st ed. Elsevier, pp. 247-262.