Discuss the problems that the emu will face, International Economics

Q. Discuss the problems that the EMU will face in the coming years.

Answer: Europe isn't an optimum currency area so asymmetric economic developments within different countries of the euro zone that call for different interest rates can't be implemented. The political part of the confederacy is much weaker and may limit the political legitimacy of the economic unification. On the one hand labour markets stay remains highly unionized and subject to high government unemployment taxes and other regulations impeding labour mobility. On the other side capital has high inducement to migrate to the EMU countries with the lowest wages. Constraints on national monetary policy are likely to be painful due to the nonexistence of substantial fiscal federalism fiscal transfer of resources from the rich to the less rich countries within the European Union. The EU is considering a major expansion of its membership into Eastern Europe and the Mediterranean. This will cause several coordination costs and as well the issue of representation of small and big countries.

Posted Date: 6/29/2013 3:16:40 AM | Location : United States







Related Discussions:- Discuss the problems that the emu will face, Assignment Help, Ask Question on Discuss the problems that the emu will face, Get Answer, Expert's Help, Discuss the problems that the emu will face Discussions

Write discussion on Discuss the problems that the emu will face
Your posts are moderated
Related Questions

what are the limitations of net barter terms of trade

wate is the national incom of indi aims & objectives


derive the eqilibrium equation for the trade balance

Q. Explain why under the gold standard a perpetual surplus or a perpetual deficit is impossible. Answer: Since specie inflows drive up domestic prices and restore symmetry in

Q. What are the main factors determining the aggregate money demand? Answer: Three major factors: the price level, interest rate and real national income. A increase i

I am writing a paper on dependancy theory in Ghana and I am having trouble understanding the basics of peripheral capitalism.

explain the product cycle theory in international trade

Marketing Considering that customer relationship marketing places a progressive and developmental expectation on organisations consider a start point for such an activity and ho