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The EMU debt criterion: an interpretation

Author

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  • R. BERNDSEN

    (De Nederlandsche Bank)

Abstract

The convergence criteria specified in the Maastricht Treaty on government deficit and debt, inflation, the exchange rate and the long-term interest rate will play an important, if not decisive, role in determining which countries move on to the third stage of the Economic and Monetary Union (EMU). The aim of this work is to provide a possible interpretation of the EMU debt criterion. The author investigates the government debt criterion which, as Article 104c(2b) of the Treaty shows, has a considerable scope for interpretation. Although this subject has been discussed extensively, relatively little work has been done to develop a clear interpretation of the EMU debt criterion. A flexible approach is adopted in which parts of the relevant Treaty text are characterised using two parameters.

Suggested Citation

  • R. Berndsen, 1997. "The EMU debt criterion: an interpretation," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 50(203), pages 505-533.
    • Handle: RePEc:psl:bnlqrr:1997:44
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    File URL: http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/10586/10470
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    References listed on IDEAS

    as
    1. Buiter, W.H. & Corsetti, G. & Roubini, N., 1992. "Excessive Deficits: Sense and Nonsence in the Treaty of Maastricht," Papers 674, Yale - Economic Growth Center.
    2. Masson, Paul R, 1996. "Fiscal Dimensions of EMU," Economic Journal, Royal Economic Society, vol. 106(437), pages 996-1004, July.
    3. Robert Holzmann & Yves Hervé & Roland Demmel, 1996. "The maastricht fiscal criteria: Required but ineffective?," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 23(1), pages 25-58, February.
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    Cited by:

    1. L.L. Pasinetti, 1998. "European Union at the end of 1997: who is within the public finance “sustainability†zone?," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 51(204), pages 17-36.
    2. L.L. Pasinetti, 1998. "European Union at the end of 1997: who is within the public finance “sustainability†zone?," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 51(204), pages 17-36.

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    More about this item

    Keywords

    Economic and Monetary Union; Government debt criterion; Maastricht Treaty;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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