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J. Onno de Beaufort Wijnholds European Central Bank 10th Dubrovnik Economic Conference

J. Onno de Beaufort Wijnholds European Central Bank 10th Dubrovnik Economic Conference. Panel Discussion: What after the euro adoption?. What are the policy challenges related to membership of a monetary union?... …The experience of Portugal and Spain might provide some valuable insights.

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J. Onno de Beaufort Wijnholds European Central Bank 10th Dubrovnik Economic Conference

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  1. J. Onno de Beaufort Wijnholds European Central Bank 10th Dubrovnik Economic Conference Panel Discussion:What after the euro adoption?

  2. What are the policy challenges related to membership of a monetary union?... …The experience of Portugal and Spain might provide some valuable insights.

  3. Observation #1: Spain has outperformed Portugal as regards economic growth and fiscal solidity. (Annual percent change/In percent of GDP) Source: IMF.

  4. Observation #2: The much stronger increase in ULC in Portugal ... (Annual percent change) Source: Broad Economic Policy Guidelines.

  5. … had a bearing on the employment dynamics and the development of the current account. (Annual percent change/In percent of GDP) Source: IMF.

  6. Observation #3: Spain has been more successful in attracting FDI than Portugal. (In billions of euro) Source: IMF.

  7. What are the lessons to be learned from these countries’ experiences? • Spain put its fiscal position on a sound footing and successfully implemented structural reforms. • Portugal conducted an overly loose fiscal policy and tackled less vigorously structural impediments to growth and employment creation.

  8. Conclusions National policymakers face specific challenges in the context of a monetary union, relating inter alia to fiscal discipline, wage restraint and sound institutions. Failing to meet these challenges will adversely affect a country’s economic performance.

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