The case for Economic and Monetary Union

Europa e Portugal

Resumo

Although not all future EMU members have similar economic structures, more economic integration may actually reduce rather than aggravate their vulnerability to asymmetric shocks. On the other hand, in Europe labour mobility is low, but wages respond quite rapidly to price movements. In some countries, such as Portugal, wages respond not only to prices but also to Unemployment. Portugal should therefore aim at reducing the main weaknesses of its economy instead of delaying structural adjustment in the hope for additional structural funds, a federal co-insurance fund or exchange rate adjustments.

ln the long run the ECB will only be credible if fully accountable. Too informal an accountability, if institutions are not re-negotiating proof, does not guarantee a lasting reform. To ensure the independence of monetary policy from the political business cyde vvhile guaranteeing its proper accountability, the European Parliament should be granted the appropriate powers to fulfil the role of a principal lor the ECB.

As in most other EU countries, the challenge posed by EMU to Portugal has worked as a mechanism for economic stabilisation and as a pre-condition for structural reform and longterm development. It has created the necessary consensus to overcome specific interests in the pursuit of social and economic walfare. The politicaI consensus took long to build but seems; to be mature with respect not only to EMU but also to the wider goals of European integration.