Real Divergence Across Europe and the Limits of EMU Macroeconomic Governance

The paper focusses on the absence in the EMU of the appropriate institutional setting for tackling the real convergence problem after the successful achievement of nominal convergence. The mai argument is that an EMU macroeconomic governance with a common monetary policy but national fiscal policy is not viable as harsher market competition would require the strengthening of fiscal coordination across Europe, also to cope with widening macroeconomic performances between the Core and the Periphery.