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EMU@10: successes and challenges after 10 years of Economic and Monetary Union

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Foreword by Commissioner Almunia

A full decade after Europe's leaders took the decision to launch the euro, we have good reason to be proud of our single currency. The Economic and Monetary Union and the euro are a major success. For its member countries, EMU has anchored macroeconomic stability, and increased cross border trade, financial integration and investment. For the EU as a whole, the euro is a keystone of further economic integration and a potent symbol of our growing political unity. And for the world, the euro is a major new pillar in the international monetary system and a pole of stability for the global economy. As the euro area enlarges in the coming years, its benefits will increasingly spread to the new EU members that joined in 2004 and 2007.

Yet important work still lies ahead. In the coming decade, we must build on the achievements of the last 10 years, address the remaining shortcomings and prepare for the challenges of the future. Globalisation, ageing and climate change require a more adaptable and dynamic economy. In the 21st century, European citizens demand that economic competitiveness and flexibility be accompanied by greater opportunities and stronger social cohesion.

I believe that there is scope to strengthen the framework of EMU and draw greater benefits from the euro. Sound macroeconomic policies coupled with a targeted agenda of structural reforms are key to meet our goals for growth and social justice. For countries of the euro area, ensuring good economic policies is a matter for common concern. But we cannot rely on market discipline alone. We need to deepen and broaden macroeconomic surveillance in EMU and encourage structural reforms by integrating them into the process of policy coordination. We must become the global political actor that our economic weight and international currency demands. This will only come with a well defined international strategy and a clear voice to present our positions in the global arena. It will require political will and determination to implement this comprehensive agenda. Moreover, the new Lisbon Treaty, once ratified, will increase the capacity for stronger coordination and surveillance of our economic policies.

Building on the policy agenda put forward in the Commission Communication and the extensive analysis presented in this report I intend to launch, in the second half of 2008, a debate on the future of EMU and promote consensus on the building blocks of such an agenda. The conclusions that we draw from this debate will feed into new, operational proposals to be advanced by the European Commission and will shape a longer term policy roadmap that will ensure EMU continues to flourish in the next decade and beyond.

(European Economy 2. June 2008. Brussels. 342pp. Tab. Graph. Bibliogr. )

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