The Euro and Internal Economic Policy Coordination

Abstract

Ever since the breakdown of the Bretton Woods system in 1973, economists and policy-makers alike have been confronted with the issue of international economic policy coordination. In the 1980s, the gathering of G7 Finance Ministers and Central Bank Governors emerged as the main international coordination forum, culminating in the Plaza and Louvre agreements of 1985 and 1987.1 But recent events such as the Asian or Russian crises have underscored the limitations of what basically amounts to an informal coordination framework. Subsequently, the attention of policy-makers, as exemplified for instance in the action plan of the G7 leaders of October 1998,2 is now turning towards the strengthening of institutions such as the IMF, the World Bank and the BIS.