Read the European Parliament's document entitled:
"
The European System of Central Banks" and the European Community's discussion of
The Stability and Growth Pact." (Viewing these documents requires
the Adobe Acrobat reader plugin. If this is not loaded on your computer, a free copy may be
downloaded by clicking
here.)
Questions
- Explain why monetary policies must be coordinated for a common currency to exist.
- Discuss the structure of the Central Bank System during Stage III of the transition to the
Euro.
- How will monetary policy be conducted under the "single monetary policy?"
- Why is there a need to limit the size of government deficits?
- Why might there be a need for sanctions?
